Correlation Between Samhyun and ChipsMedia

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

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

Diversification Opportunities for Samhyun and ChipsMedia

0.08

Correlation Coefficient

Samhyun  ChipsMedia

Significant diversification

The 3 months correlation between Samhyun and ChipsMedia is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Samhyun and ChipsMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipsMedia and Samhyun 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 Samhyun are associated (or correlated) with ChipsMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChipsMedia has no effect on the direction of Samhyun i.e., Samhyun and ChipsMedia go up and down completely randomly.

Pair Corralation between Samhyun and ChipsMedia

Assuming the 90 days trading horizon Samhyun is expected to under-perform the ChipsMedia. In addition to that, Samhyun is 1.14 times more volatile than ChipsMedia. It trades about -0.03 of its total potential returns per unit of risk. ChipsMedia is currently generating about 0.04 per unit of volatility. If you would invest  965,525  in ChipsMedia on October 1, 2024 and sell it today you would earn a total of  492,475  from holding ChipsMedia or generate 51.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	41.04%
Values	Daily Returns

Samhyun  vs.  ChipsMedia

Samhyun

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Samhyun are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samhyun sustained solid returns over the last few months and may actually be approaching a breakup point.

ChipsMedia

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Samhyun and ChipsMedia

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

The idea behind Samhyun and ChipsMedia 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.