Correlation Between Samsung Electronics and Sebo Manufacturing
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sebo Manufacturing 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 Sebo Manufacturing 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 Sebo Manufacturing Engineering, you can compare the effects of market volatilities on Samsung Electronics and Sebo Manufacturing 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 Sebo Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sebo Manufacturing.
Diversification Opportunities for Samsung Electronics and Sebo Manufacturing
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samsung and Sebo is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sebo Manufacturing Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sebo Manufacturing 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 Sebo Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sebo Manufacturing has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sebo Manufacturing go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sebo Manufacturing
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Sebo Manufacturing. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.09 times less risky than Sebo Manufacturing. The stock trades about -0.2 of its potential returns per unit of risk. The Sebo Manufacturing Engineering is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,047,000 in Sebo Manufacturing Engineering on November 9, 2024 and sell it today you would earn a total of 1,000.00 from holding Sebo Manufacturing Engineering or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Sebo Manufacturing Engineering
Performance |
| Timeline |
| Samsung Electronics |
| Sebo Manufacturing |
Samsung Electronics and Sebo Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Sebo Manufacturing
The main advantage of trading using opposite Samsung Electronics and Sebo Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sebo Manufacturing 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 Sebo Manufacturing will offset losses from the drop in Sebo Manufacturing's long position.| Samsung Electronics vs. Shinil Electronics Co | Samsung Electronics vs. Anam Electronics Co | Samsung Electronics vs. Alton Sports CoLtd | Samsung Electronics vs. Sam Yang Foods |
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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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