Correlation Between Oriental Precision and Samsung Publishing

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

By analyzing existing cross correlation between Oriental Precision Engineering and Samsung Publishing Co, you can compare the effects of market volatilities on Oriental Precision and Samsung Publishing 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 Oriental Precision with a short position of Samsung Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Precision and Samsung Publishing.

Diversification Opportunities for Oriental Precision and Samsung Publishing

0.16

Correlation Coefficient

Oriental Precision  Samsung Publishing

Average diversification

The 3 months correlation between Oriental and Samsung is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Precision Engineering and Samsung Publishing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Publishing and Oriental Precision 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 Oriental Precision Engineering are associated (or correlated) with Samsung Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Publishing has no effect on the direction of Oriental Precision i.e., Oriental Precision and Samsung Publishing go up and down completely randomly.

Pair Corralation between Oriental Precision and Samsung Publishing

Assuming the 90 days trading horizon Oriental Precision Engineering is expected to generate 0.85 times more return on investment than Samsung Publishing. However, Oriental Precision Engineering is 1.17 times less risky than Samsung Publishing. It trades about 0.07 of its potential returns per unit of risk. Samsung Publishing Co is currently generating about -0.01 per unit of risk. If you would invest  241,352  in Oriental Precision Engineering on October 4, 2024 and sell it today you would earn a total of  279,648  from holding Oriental Precision Engineering or generate 115.87% return on investment over 90 days.

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

Oriental Precision Engineering  vs.  Samsung Publishing Co

Oriental Precision

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oriental Precision Engineering are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Oriental Precision sustained solid returns over the last few months and may actually be approaching a breakup point.

Samsung Publishing

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Publishing Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Samsung Publishing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Oriental Precision and Samsung Publishing

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

The idea behind Oriental Precision Engineering and Samsung Publishing 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.