Correlation Between Samsung Electronics and GS Engineering
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and GS Engineering 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 GS Engineering 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 GS Engineering Construction, you can compare the effects of market volatilities on Samsung Electronics and GS Engineering 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 GS Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and GS Engineering.
Diversification Opportunities for Samsung Electronics and GS Engineering
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and 006360 is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and GS Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Engineering Const 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 GS Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Engineering Const has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and GS Engineering go up and down completely randomly.
Pair Corralation between Samsung Electronics and GS Engineering
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.82 times more return on investment than GS Engineering. However, Samsung Electronics Co is 1.22 times less risky than GS Engineering. It trades about 0.22 of its potential returns per unit of risk. GS Engineering Construction is currently generating about 0.1 per unit of risk. If you would invest 4,990,000 in Samsung Electronics Co on September 15, 2024 and sell it today you would earn a total of 620,000 from holding Samsung Electronics Co or generate 12.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. GS Engineering Construction
Performance |
| Timeline |
| Samsung Electronics |
| GS Engineering Const |
Samsung Electronics and GS Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and GS Engineering
The main advantage of trading using opposite Samsung Electronics and GS Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, GS Engineering 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 GS Engineering will offset losses from the drop in GS Engineering's long position.| Samsung Electronics vs. Cube Entertainment | Samsung Electronics vs. Dreamus Company | Samsung Electronics vs. LG Energy Solution | Samsung Electronics vs. Dongwon System |
| GS Engineering vs. Samsung Electronics Co | GS Engineering vs. Samsung Electronics Co | GS Engineering vs. SK Hynix | GS Engineering 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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