Correlation Between Samsung Electronics and Doosan
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Doosan 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 Electronics and Doosan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Doosan, you can compare the effects of market volatilities on Samsung Electronics and Doosan 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 Electronics with a short position of Doosan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Doosan.
Diversification Opportunities for Samsung Electronics and Doosan
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Doosan is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Doosan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan and Samsung Electronics 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 Electronics Co are associated (or correlated) with Doosan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doosan has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Doosan go up and down completely randomly.
Pair Corralation between Samsung Electronics and Doosan
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Doosan. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.58 times less risky than Doosan. The stock trades about -0.12 of its potential returns per unit of risk. The Doosan is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 20,050,000 in Doosan on September 1, 2024 and sell it today you would lose (390,000) from holding Doosan or give up 1.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. Doosan
Performance |
| Timeline |
| Samsung Electronics |
| Doosan |
Samsung Electronics and Doosan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Doosan
The main advantage of trading using opposite Samsung Electronics and Doosan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Doosan 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 Doosan will offset losses from the drop in Doosan's long position.| Samsung Electronics vs. Konan Technology | Samsung Electronics vs. Orbitech Co | Samsung Electronics vs. Netmarble Games Corp | Samsung Electronics vs. Golden Bridge Investment |
| Doosan vs. Shinsegae Engineering Construction | Doosan vs. Nam Hwa Construction | Doosan vs. Seoul Broadcasting System | Doosan vs. Dongbang Transport Logistics |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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