Correlation Between Samsung SDI and TAMURA P

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Can any of the company-specific risk be diversified away by investing in both Samsung SDI and TAMURA P 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 SDI and TAMURA P into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung SDI Co and TAMURA P, you can compare the effects of market volatilities on Samsung SDI and TAMURA P 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 SDI with a short position of TAMURA P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and TAMURA P.

Diversification Opportunities for Samsung SDI and TAMURA P

0.95
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Samsung and TAMURA is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI Co and TAMURA P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAMURA P and Samsung SDI 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 SDI Co are associated (or correlated) with TAMURA P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAMURA P has no effect on the direction of Samsung SDI i.e., Samsung SDI and TAMURA P go up and down completely randomly.

Pair Corralation between Samsung SDI and TAMURA P

Assuming the 90 days trading horizon Samsung SDI Co is expected to under-perform the TAMURA P. In addition to that, Samsung SDI is 1.78 times more volatile than TAMURA P. It trades about -0.22 of its total potential returns per unit of risk. TAMURA P is currently generating about -0.06 per unit of volatility. If you would invest  320.00  in TAMURA P on October 6, 2024 and sell it today you would lose (14.00) from holding TAMURA P or give up 4.37% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy97.5%
ValuesDaily Returns

Samsung SDI Co  vs.  TAMURA P

 Performance 
       Timeline  
Samsung SDI 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Samsung SDI Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
TAMURA P 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days TAMURA P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Samsung SDI and TAMURA P Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Samsung SDI and TAMURA P

The main advantage of trading using opposite Samsung SDI and TAMURA P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, TAMURA P 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 TAMURA P will offset losses from the drop in TAMURA P's long position.
The idea behind Samsung SDI Co and TAMURA P 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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