Correlation Between Samick Musical and Ottogi

Can any of the company-specific risk be diversified away by investing in both Samick Musical and Ottogi 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 Samick Musical and Ottogi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Samick Musical Instruments and Ottogi, you can compare the effects of market volatilities on Samick Musical and Ottogi 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 Samick Musical with a short position of Ottogi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samick Musical and Ottogi.

Diversification Opportunities for Samick Musical and Ottogi

-0.39

Correlation Coefficient

Samick Musical  Ottogi

Very good diversification

The 3 months correlation between Samick and Ottogi is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Samick Musical Instruments and Ottogi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ottogi and Samick Musical 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 Samick Musical Instruments are associated (or correlated) with Ottogi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ottogi has no effect on the direction of Samick Musical i.e., Samick Musical and Ottogi go up and down completely randomly.

Pair Corralation between Samick Musical and Ottogi

Assuming the 90 days trading horizon Samick Musical is expected to generate 13.04 times less return on investment than Ottogi. In addition to that, Samick Musical is 3.34 times more volatile than Ottogi. It trades about 0.0 of its total potential returns per unit of risk. Ottogi is currently generating about 0.11 per unit of volatility. If you would invest  38,654,500  in Ottogi on December 29, 2024 and sell it today you would earn a total of  2,895,500  from holding Ottogi or generate 7.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Samick Musical Instruments  vs.  Ottogi

Samick Musical Instr

Risk-Adjusted Performance

Very Weak

Over the last 90 days Samick Musical Instruments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Samick Musical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ottogi

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ottogi are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ottogi may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Samick Musical and Ottogi

The main advantage of trading using opposite Samick Musical and Ottogi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samick Musical position performs unexpectedly, Ottogi 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 Ottogi will offset losses from the drop in Ottogi's long position.

The idea behind Samick Musical Instruments and Ottogi 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.