Correlation Between Taeyang Metal and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Taeyang Metal and Samsung Electronics 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 Taeyang Metal and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taeyang Metal Industrial and Samsung Electronics Co, you can compare the effects of market volatilities on Taeyang Metal and Samsung Electronics 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 Taeyang Metal with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taeyang Metal and Samsung Electronics.
Diversification Opportunities for Taeyang Metal and Samsung Electronics
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Taeyang and Samsung is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Taeyang Metal Industrial and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Taeyang Metal 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 Taeyang Metal Industrial are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Taeyang Metal i.e., Taeyang Metal and Samsung Electronics go up and down completely randomly.
Pair Corralation between Taeyang Metal and Samsung Electronics
Assuming the 90 days trading horizon Taeyang Metal Industrial is expected to generate 3.67 times more return on investment than Samsung Electronics. However, Taeyang Metal is 3.67 times more volatile than Samsung Electronics Co. It trades about 0.07 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.16 per unit of risk. If you would invest 471,000 in Taeyang Metal Industrial on September 15, 2024 and sell it today you would earn a total of 34,000 from holding Taeyang Metal Industrial or generate 7.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taeyang Metal Industrial vs. Samsung Electronics Co
Performance |
| Timeline |
| Taeyang Metal Industrial |
| Samsung Electronics |
Taeyang Metal and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taeyang Metal and Samsung Electronics
The main advantage of trading using opposite Taeyang Metal and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taeyang Metal position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Taeyang Metal vs. Samsung Electronics Co | Taeyang Metal vs. Samsung Electronics Co | Taeyang Metal vs. SK Hynix | Taeyang Metal vs. POSCO Holdings |
| Samsung Electronics vs. LG Corp | Samsung Electronics vs. Solution Advanced Technology | Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. Busan Ind |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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