Correlation Between Samsung Electronics and Cho Bi
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Cho Bi 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 Cho Bi 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 Cho Bi, you can compare the effects of market volatilities on Samsung Electronics and Cho Bi 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 Cho Bi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Cho Bi.
Diversification Opportunities for Samsung Electronics and Cho Bi
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Cho is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Cho Bi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cho Bi 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 Cho Bi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cho Bi has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Cho Bi go up and down completely randomly.
Pair Corralation between Samsung Electronics and Cho Bi
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.83 times more return on investment than Cho Bi. However, Samsung Electronics is 1.83 times more volatile than Cho Bi. It trades about -0.08 of its potential returns per unit of risk. Cho Bi is currently generating about -0.26 per unit of risk. If you would invest 6,185,295 in Samsung Electronics Co on August 26, 2024 and sell it today you would lose (585,295) from holding Samsung Electronics Co or give up 9.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Cho Bi
Performance |
| Timeline |
| Samsung Electronics |
| Cho Bi |
Samsung Electronics and Cho Bi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Cho Bi
The main advantage of trading using opposite Samsung Electronics and Cho Bi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Cho Bi 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 Cho Bi will offset losses from the drop in Cho Bi's long position.| Samsung Electronics vs. Dongil Metal Co | Samsung Electronics vs. Formetal Co | Samsung Electronics vs. Digital Multimedia Technology | Samsung Electronics vs. Dongwon Metal Co |
| Cho Bi vs. Haesung Industrial Co | Cho Bi vs. Kumho Industrial Co | Cho Bi vs. Formetal Co | Cho Bi vs. LS Materials |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Positions Ratings 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 | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |