Correlation Between Samsung Electronics and Mobase Electronics
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Mobase Electronics 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 Mobase Electronics 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 Mobase Electronics CoLtd, you can compare the effects of market volatilities on Samsung Electronics and Mobase Electronics 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 Mobase Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Mobase Electronics.
Diversification Opportunities for Samsung Electronics and Mobase Electronics
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Mobase is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Mobase Electronics CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobase Electronics CoLtd 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 Mobase Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobase Electronics CoLtd has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Mobase Electronics go up and down completely randomly.
Pair Corralation between Samsung Electronics and Mobase Electronics
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 2.0 times more return on investment than Mobase Electronics. However, Samsung Electronics is 2.0 times more volatile than Mobase Electronics CoLtd. It trades about -0.13 of its potential returns per unit of risk. Mobase Electronics CoLtd is currently generating about -0.48 per unit of risk. If you would invest 5,870,000 in Samsung Electronics Co on September 4, 2024 and sell it today you would lose (510,000) from holding Samsung Electronics Co or give up 8.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Mobase Electronics CoLtd
Performance |
| Timeline |
| Samsung Electronics |
| Mobase Electronics CoLtd |
Samsung Electronics and Mobase Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Mobase Electronics
The main advantage of trading using opposite Samsung Electronics and Mobase Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Mobase Electronics 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 Mobase Electronics will offset losses from the drop in Mobase Electronics' long position.| Samsung Electronics vs. Dongsin Engineering Construction | Samsung Electronics vs. Doosan Fuel Cell | Samsung Electronics vs. Daishin Balance 1 | Samsung Electronics vs. Total Soft Bank |
| Mobase Electronics vs. Korea Real Estate | Mobase Electronics vs. Busan Industrial Co | Mobase Electronics vs. UNISEM Co | Mobase Electronics vs. RPBio Inc |
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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