Correlation Between Samsung SDI and Miwon Chemicals

Can any of the company-specific risk be diversified away by investing in both Samsung SDI and Miwon Chemicals 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 Miwon Chemicals 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 Miwon Chemicals Co, you can compare the effects of market volatilities on Samsung SDI and Miwon Chemicals 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 Miwon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and Miwon Chemicals.

Diversification Opportunities for Samsung SDI and Miwon Chemicals

0.0

Correlation Coefficient

Samsung SDI  Miwon Chemicals

Pay attention - limited upside

The 3 months correlation between Samsung and Miwon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI Co and Miwon Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemicals 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 Miwon Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miwon Chemicals has no effect on the direction of Samsung SDI i.e., Samsung SDI and Miwon Chemicals go up and down completely randomly.

Pair Corralation between Samsung SDI and Miwon Chemicals

If you would invest  7,650,000  in Miwon Chemicals Co on December 25, 2024 and sell it today you would earn a total of  200,000  from holding Miwon Chemicals Co or generate 2.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.79%
Values	Daily Returns

Samsung SDI Co  vs.  Miwon Chemicals Co

Samsung SDI

Risk-Adjusted Performance

Very Weak

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

Miwon Chemicals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Miwon Chemicals Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Miwon Chemicals is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Samsung SDI and Miwon Chemicals

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

The idea behind Samsung SDI Co and Miwon Chemicals 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.