Correlation Between Samsung Electronics and Sam Chun
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sam Chun 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 Sam Chun 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 Sam Chun Dang, you can compare the effects of market volatilities on Samsung Electronics and Sam Chun 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 Sam Chun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sam Chun.
Diversification Opportunities for Samsung Electronics and Sam Chun
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Sam is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sam Chun Dang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam Chun Dang 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 Sam Chun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam Chun Dang has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sam Chun go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sam Chun
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 85.78 times less return on investment than Sam Chun. But when comparing it to its historical volatility, Samsung Electronics Co is 2.85 times less risky than Sam Chun. It trades about 0.0 of its potential returns per unit of risk. Sam Chun Dang is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,565,000 in Sam Chun Dang on September 3, 2024 and sell it today you would earn a total of 5,385,000 from holding Sam Chun Dang or generate 117.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Sam Chun Dang
Performance |
| Timeline |
| Samsung Electronics |
| Sam Chun Dang |
Samsung Electronics and Sam Chun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Sam Chun
The main advantage of trading using opposite Samsung Electronics and Sam Chun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sam Chun 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 Sam Chun will offset losses from the drop in Sam Chun's long position.| Samsung Electronics vs. Hanjoo Light Metal | Samsung Electronics vs. Taeyang Metal Industrial | Samsung Electronics vs. Daejung Chemicals Metals | Samsung Electronics vs. Youngsin Metal Industrial |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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