Correlation Between Samsung Electronics and SH Energy
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and SH Energy 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 SH Energy 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 SH Energy Chemical, you can compare the effects of market volatilities on Samsung Electronics and SH Energy 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 SH Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and SH Energy.
Diversification Opportunities for Samsung Electronics and SH Energy
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and 002360 is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and SH Energy Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SH Energy Chemical 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 SH Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SH Energy Chemical has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and SH Energy go up and down completely randomly.
Pair Corralation between Samsung Electronics and SH Energy
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.66 times more return on investment than SH Energy. However, Samsung Electronics Co is 1.51 times less risky than SH Energy. It trades about -0.02 of its potential returns per unit of risk. SH Energy Chemical is currently generating about -0.04 per unit of risk. If you would invest 5,500,000 in Samsung Electronics Co on September 12, 2024 and sell it today you would lose (100,000) from holding Samsung Electronics Co or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. SH Energy Chemical
Performance |
| Timeline |
| Samsung Electronics |
| SH Energy Chemical |
Samsung Electronics and SH Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and SH Energy
The main advantage of trading using opposite Samsung Electronics and SH Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, SH Energy 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 SH Energy will offset losses from the drop in SH Energy's long position.| Samsung Electronics vs. Cube Entertainment | Samsung Electronics vs. Dreamus Company | Samsung Electronics vs. LG Energy Solution | Samsung Electronics vs. Dongwon System |
| SH Energy vs. Samsung Electronics Co | SH Energy vs. Samsung Electronics Co | SH Energy vs. SK Hynix | SH Energy vs. POSCO Holdings |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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