Correlation Between Samwha Electronics and Mirai Semiconductors

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

By analyzing existing cross correlation between Samwha Electronics Co and Mirai Semiconductors Co, you can compare the effects of market volatilities on Samwha Electronics and Mirai Semiconductors 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 Samwha Electronics with a short position of Mirai Semiconductors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samwha Electronics and Mirai Semiconductors.

Diversification Opportunities for Samwha Electronics and Mirai Semiconductors

-0.07

Correlation Coefficient

Samwha Electronics  Mirai Semiconductors

Good diversification

The 3 months correlation between Samwha and Mirai is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Samwha Electronics Co and Mirai Semiconductors Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirai Semiconductors and Samwha Electronics 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 Samwha Electronics Co are associated (or correlated) with Mirai Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirai Semiconductors has no effect on the direction of Samwha Electronics i.e., Samwha Electronics and Mirai Semiconductors go up and down completely randomly.

Pair Corralation between Samwha Electronics and Mirai Semiconductors

Assuming the 90 days trading horizon Samwha Electronics Co is expected to generate 1.07 times more return on investment than Mirai Semiconductors. However, Samwha Electronics is 1.07 times more volatile than Mirai Semiconductors Co. It trades about 0.15 of its potential returns per unit of risk. Mirai Semiconductors Co is currently generating about 0.06 per unit of risk. If you would invest  315,500  in Samwha Electronics Co on December 23, 2024 and sell it today you would earn a total of  103,000  from holding Samwha Electronics Co or generate 32.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Samwha Electronics Co  vs.  Mirai Semiconductors Co

Samwha Electronics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Samwha Electronics Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samwha Electronics sustained solid returns over the last few months and may actually be approaching a breakup point.

Mirai Semiconductors

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mirai Semiconductors Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mirai Semiconductors may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Samwha Electronics and Mirai Semiconductors

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

The idea behind Samwha Electronics Co and Mirai Semiconductors 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.

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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.