Correlation Between Samsung Electronics and Shinsegae
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Shinsegae 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 Shinsegae 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 Shinsegae, you can compare the effects of market volatilities on Samsung Electronics and Shinsegae 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 Shinsegae. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Shinsegae.
Diversification Opportunities for Samsung Electronics and Shinsegae
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Shinsegae is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Shinsegae in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae 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 Shinsegae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Shinsegae go up and down completely randomly.
Pair Corralation between Samsung Electronics and Shinsegae
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.99 times more return on investment than Shinsegae. However, Samsung Electronics Co is 1.01 times less risky than Shinsegae. It trades about -0.01 of its potential returns per unit of risk. Shinsegae is currently generating about -0.05 per unit of risk. If you would invest 6,072,013 in Samsung Electronics Co on November 2, 2024 and sell it today you would lose (702,013) from holding Samsung Electronics Co or give up 11.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Shinsegae
Performance |
| Timeline |
| Samsung Electronics |
| Shinsegae |
Samsung Electronics and Shinsegae Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Shinsegae
The main advantage of trading using opposite Samsung Electronics and Shinsegae positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Shinsegae 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 Shinsegae will offset losses from the drop in Shinsegae's long position.| Samsung Electronics vs. Tamul Multimedia Co | Samsung Electronics vs. ChipsMedia | Samsung Electronics vs. T3 Entertainment Co | Samsung Electronics vs. Digital Multimedia Technology |
| Shinsegae vs. Youngchang Chemical Co | Shinsegae vs. TK Chemical | Shinsegae vs. Kyung In Synthetic Corp | Shinsegae vs. Foodnamoo |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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