Correlation Between Samsung SDI and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both Samsung SDI and Sunny Optical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Samsung SDI and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung SDI Co and Sunny Optical Technology, you can compare the effects of market volatilities on Samsung SDI and Sunny Optical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Samsung SDI with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and Sunny Optical.
Diversification Opportunities for Samsung SDI and Sunny Optical
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Sunny is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI Co and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical Technology and Samsung SDI is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Samsung SDI Co are associated (or correlated) with Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of Samsung SDI i.e., Samsung SDI and Sunny Optical go up and down completely randomly.
Pair Corralation between Samsung SDI and Sunny Optical
Assuming the 90 days trading horizon Samsung SDI Co is expected to generate 1.08 times more return on investment than Sunny Optical. However, Samsung SDI is 1.08 times more volatile than Sunny Optical Technology. It trades about -0.12 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about -0.16 per unit of risk. If you would invest 4,140 in Samsung SDI Co on October 23, 2024 and sell it today you would lose (270.00) from holding Samsung SDI Co or give up 6.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Samsung SDI Co vs. Sunny Optical Technology
Performance |
| Timeline |
| Samsung SDI |
| Sunny Optical Technology |
Samsung SDI and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung SDI and Sunny Optical
The main advantage of trading using opposite Samsung SDI and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, Sunny Optical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sunny Optical will offset losses from the drop in Sunny Optical's long position.| Samsung SDI vs. FIREWEED METALS P | Samsung SDI vs. SIERRA METALS | Samsung SDI vs. Fortescue Metals Group | Samsung SDI vs. GREENX METALS LTD |
| Sunny Optical vs. Amphenol | Sunny Optical vs. Hon Hai Precision | Sunny Optical vs. Samsung SDI Co | Sunny Optical vs. Murata Manufacturing Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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