Correlation Between Samsung Fire and Dongwoon Anatech

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Can any of the company-specific risk be diversified away by investing in both Samsung Fire and Dongwoon Anatech 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 Fire and Dongwoon Anatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Fire Marine and Dongwoon Anatech Co, you can compare the effects of market volatilities on Samsung Fire and Dongwoon Anatech 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 Fire with a short position of Dongwoon Anatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Fire and Dongwoon Anatech.

Diversification Opportunities for Samsung Fire and Dongwoon Anatech

-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Samsung and Dongwoon is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Fire Marine and Dongwoon Anatech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoon Anatech and Samsung Fire 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 Fire Marine are associated (or correlated) with Dongwoon Anatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoon Anatech has no effect on the direction of Samsung Fire i.e., Samsung Fire and Dongwoon Anatech go up and down completely randomly.

Pair Corralation between Samsung Fire and Dongwoon Anatech

Assuming the 90 days trading horizon Samsung Fire is expected to generate 1.45 times less return on investment than Dongwoon Anatech. But when comparing it to its historical volatility, Samsung Fire Marine is 1.36 times less risky than Dongwoon Anatech. It trades about 0.07 of its potential returns per unit of risk. Dongwoon Anatech Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,705,772  in Dongwoon Anatech Co on October 9, 2024 and sell it today you would earn a total of  217,228  from holding Dongwoon Anatech Co or generate 12.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Samsung Fire Marine  vs.  Dongwoon Anatech Co

 Performance 
       Timeline  
Samsung Fire Marine 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Fire Marine are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samsung Fire may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Dongwoon Anatech 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Dongwoon Anatech Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Dongwoon Anatech sustained solid returns over the last few months and may actually be approaching a breakup point.

Samsung Fire and Dongwoon Anatech Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Samsung Fire and Dongwoon Anatech

The main advantage of trading using opposite Samsung Fire and Dongwoon Anatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Fire position performs unexpectedly, Dongwoon Anatech 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 Dongwoon Anatech will offset losses from the drop in Dongwoon Anatech's long position.
The idea behind Samsung Fire Marine and Dongwoon Anatech Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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