Correlation Between Samsung SDI and Amphenol

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

Diversification Opportunities for Samsung SDI and Amphenol

-0.94

Correlation Coefficient

Samsung SDI  Amphenol

Pay attention - limited upside

The 3 months correlation between Samsung and Amphenol is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI Co and Amphenol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amphenol 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 Amphenol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amphenol has no effect on the direction of Samsung SDI i.e., Samsung SDI and Amphenol go up and down completely randomly.

Pair Corralation between Samsung SDI and Amphenol

Assuming the 90 days trading horizon Samsung SDI Co is expected to under-perform the Amphenol. In addition to that, Samsung SDI is 1.35 times more volatile than Amphenol. It trades about -0.1 of its total potential returns per unit of risk. Amphenol is currently generating about 0.04 per unit of volatility. If you would invest  6,325  in Amphenol on September 23, 2024 and sell it today you would earn a total of  475.00  from holding Amphenol or generate 7.51% return on investment over 90 days.

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

Samsung SDI Co  vs.  Amphenol

Samsung SDI

Risk-Adjusted Performance

0 of 100

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 fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Amphenol

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amphenol are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Amphenol reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung SDI and Amphenol

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

The idea behind Samsung SDI Co and Amphenol 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.