Correlation Between LEADCORP and Samsung SDI
Can any of the company-specific risk be diversified away by investing in both LEADCORP and Samsung SDI 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 LEADCORP and Samsung SDI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The LEADCORP and Samsung SDI, you can compare the effects of market volatilities on LEADCORP and Samsung SDI 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 LEADCORP with a short position of Samsung SDI. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEADCORP and Samsung SDI.
Diversification Opportunities for LEADCORP and Samsung SDI
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LEADCORP and Samsung is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding The LEADCORP and Samsung SDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung SDI and LEADCORP 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 The LEADCORP are associated (or correlated) with Samsung SDI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung SDI has no effect on the direction of LEADCORP i.e., LEADCORP and Samsung SDI go up and down completely randomly.
Pair Corralation between LEADCORP and Samsung SDI
Assuming the 90 days trading horizon The LEADCORP is expected to generate 0.25 times more return on investment than Samsung SDI. However, The LEADCORP is 3.97 times less risky than Samsung SDI. It trades about -0.19 of its potential returns per unit of risk. Samsung SDI is currently generating about -0.12 per unit of risk. If you would invest 468,000 in The LEADCORP on August 30, 2024 and sell it today you would lose (42,500) from holding The LEADCORP or give up 9.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
The LEADCORP vs. Samsung SDI
Performance |
Timeline |
LEADCORP |
Samsung SDI |
LEADCORP and Samsung SDI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LEADCORP and Samsung SDI
The main advantage of trading using opposite LEADCORP and Samsung SDI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEADCORP position performs unexpectedly, Samsung SDI 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 Samsung SDI will offset losses from the drop in Samsung SDI's long position.LEADCORP vs. Cube Entertainment | LEADCORP vs. Dreamus Company | LEADCORP vs. LG Energy Solution | LEADCORP vs. Dongwon System |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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