Correlation Between Daelim Industrial and Samji Electronics
Can any of the company-specific risk be diversified away by investing in both Daelim Industrial and Samji Electronics 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 Daelim Industrial and Samji Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daelim Industrial Co and Samji Electronics Co, you can compare the effects of market volatilities on Daelim Industrial and Samji Electronics 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 Daelim Industrial with a short position of Samji Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daelim Industrial and Samji Electronics.
Diversification Opportunities for Daelim Industrial and Samji Electronics
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daelim and Samji is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Daelim Industrial Co and Samji Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samji Electronics and Daelim Industrial 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 Daelim Industrial Co are associated (or correlated) with Samji Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samji Electronics has no effect on the direction of Daelim Industrial i.e., Daelim Industrial and Samji Electronics go up and down completely randomly.
Pair Corralation between Daelim Industrial and Samji Electronics
Assuming the 90 days trading horizon Daelim Industrial Co is expected to under-perform the Samji Electronics. In addition to that, Daelim Industrial is 2.23 times more volatile than Samji Electronics Co. It trades about -0.11 of its total potential returns per unit of risk. Samji Electronics Co is currently generating about -0.07 per unit of volatility. If you would invest 859,000 in Samji Electronics Co on September 12, 2024 and sell it today you would lose (33,000) from holding Samji Electronics Co or give up 3.84% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Daelim Industrial Co vs. Samji Electronics Co
Performance |
Timeline |
Daelim Industrial |
Samji Electronics |
Daelim Industrial and Samji Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Daelim Industrial and Samji Electronics
The main advantage of trading using opposite Daelim Industrial and Samji Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daelim Industrial position performs unexpectedly, Samji Electronics 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 Samji Electronics will offset losses from the drop in Samji Electronics' long position.Daelim Industrial vs. Haitai Confectionery Foods | Daelim Industrial vs. Samlip General Foods | Daelim Industrial vs. Seoul Food Industrial | Daelim Industrial vs. KT Submarine Telecom |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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