Correlation Between Samsung Publishing and DataSolution

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

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

Diversification Opportunities for Samsung Publishing and DataSolution

0.22

Correlation Coefficient

Samsung Publishing  DataSolution

Modest diversification

The 3 months correlation between Samsung and DataSolution is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Publishing Co and DataSolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DataSolution and Samsung Publishing 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 Publishing Co are associated (or correlated) with DataSolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DataSolution has no effect on the direction of Samsung Publishing i.e., Samsung Publishing and DataSolution go up and down completely randomly.

Pair Corralation between Samsung Publishing and DataSolution

Assuming the 90 days trading horizon Samsung Publishing is expected to generate 1.08 times less return on investment than DataSolution. But when comparing it to its historical volatility, Samsung Publishing Co is 1.15 times less risky than DataSolution. It trades about 0.09 of its potential returns per unit of risk. DataSolution is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  401,500  in DataSolution on September 14, 2024 and sell it today you would earn a total of  68,500  from holding DataSolution or generate 17.06% return on investment over 90 days.

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

Samsung Publishing Co  vs.  DataSolution

Samsung Publishing

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Publishing Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samsung Publishing sustained solid returns over the last few months and may actually be approaching a breakup point.

DataSolution

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DataSolution are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, DataSolution sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Publishing and DataSolution

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

The idea behind Samsung Publishing Co and DataSolution 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.