Correlation Between Samsung Electronics and DB HiTek
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and DB HiTek 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 DB HiTek 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 DB HiTek Co, you can compare the effects of market volatilities on Samsung Electronics and DB HiTek 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 DB HiTek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and DB HiTek.
Diversification Opportunities for Samsung Electronics and DB HiTek
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and 000990 is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and DB HiTek Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB HiTek 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 DB HiTek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB HiTek has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and DB HiTek go up and down completely randomly.
Pair Corralation between Samsung Electronics and DB HiTek
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.62 times more return on investment than DB HiTek. However, Samsung Electronics Co is 1.61 times less risky than DB HiTek. It trades about -0.05 of its potential returns per unit of risk. DB HiTek Co is currently generating about -0.06 per unit of risk. If you would invest 7,150,627 in Samsung Electronics Co on September 12, 2024 and sell it today you would lose (1,750,627) from holding Samsung Electronics Co or give up 24.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. DB HiTek Co
Performance |
| Timeline |
| Samsung Electronics |
| DB HiTek |
Samsung Electronics and DB HiTek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and DB HiTek
The main advantage of trading using opposite Samsung Electronics and DB HiTek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, DB HiTek 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 DB HiTek will offset losses from the drop in DB HiTek's long position.| Samsung Electronics vs. Cube Entertainment | Samsung Electronics vs. Dreamus Company | Samsung Electronics vs. LG Energy Solution | Samsung Electronics vs. Dongwon System |
| DB HiTek vs. CJ Seafood Corp | DB HiTek vs. Hankukpackage Co | DB HiTek vs. CJ Seafood Corp | DB HiTek vs. Shinsegae Food |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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