Correlation Between Samsung SDI and TDK
Can any of the company-specific risk be diversified away by investing in both Samsung SDI and TDK 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 TDK 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 TDK Corporation, you can compare the effects of market volatilities on Samsung SDI and TDK 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 TDK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and TDK.
Diversification Opportunities for Samsung SDI and TDK
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and TDK is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI Co and TDK Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TDK Corporation 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 TDK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TDK Corporation has no effect on the direction of Samsung SDI i.e., Samsung SDI and TDK go up and down completely randomly.
Pair Corralation between Samsung SDI and TDK
Assuming the 90 days trading horizon Samsung SDI Co is expected to under-perform the TDK. In addition to that, Samsung SDI is 1.28 times more volatile than TDK Corporation. It trades about -0.05 of its total potential returns per unit of risk. TDK Corporation is currently generating about 0.07 per unit of volatility. If you would invest 602.00 in TDK Corporation on August 28, 2024 and sell it today you would earn a total of 544.00 from holding TDK Corporation or generate 90.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Samsung SDI Co vs. TDK Corp.
Performance |
| Timeline |
| Samsung SDI |
| TDK Corporation |
Samsung SDI and TDK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung SDI and TDK
The main advantage of trading using opposite Samsung SDI and TDK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, TDK 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 TDK will offset losses from the drop in TDK's long position.| Samsung SDI vs. FORWARD AIR P | Samsung SDI vs. WIZZ AIR HLDGUNSPADR4 | Samsung SDI vs. Ubisoft Entertainment SA | Samsung SDI vs. SYSTEMAIR AB |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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