Correlation Between Samsung SDI and Corning Incorporated

Can any of the company-specific risk be diversified away by investing in both Samsung SDI and Corning Incorporated 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 Corning Incorporated 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 Corning Incorporated, you can compare the effects of market volatilities on Samsung SDI and Corning Incorporated 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 Corning Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and Corning Incorporated.

Diversification Opportunities for Samsung SDI and Corning Incorporated

0.24

Correlation Coefficient

Samsung SDI  Corning Incorporated

Modest diversification

The 3 months correlation between Samsung and Corning is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI Co and Corning Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corning Incorporated 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 Corning Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corning Incorporated has no effect on the direction of Samsung SDI i.e., Samsung SDI and Corning Incorporated go up and down completely randomly.

Pair Corralation between Samsung SDI and Corning Incorporated

Assuming the 90 days trading horizon Samsung SDI Co is expected to under-perform the Corning Incorporated. In addition to that, Samsung SDI is 1.31 times more volatile than Corning Incorporated. It trades about -0.13 of its total potential returns per unit of risk. Corning Incorporated is currently generating about 0.02 per unit of volatility. If you would invest  4,589  in Corning Incorporated on December 27, 2024 and sell it today you would earn a total of  27.00  from holding Corning Incorporated or generate 0.59% return on investment over 90 days.

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

Samsung SDI Co  vs.  Corning Incorporated

Samsung SDI

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Corning Incorporated

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Corning Incorporated are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Corning Incorporated is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Samsung SDI and Corning Incorporated

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

The idea behind Samsung SDI Co and Corning Incorporated 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.