Correlation Between Samsung Electronics and Choil Aluminum
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Choil Aluminum 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 Choil Aluminum 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 Choil Aluminum, you can compare the effects of market volatilities on Samsung Electronics and Choil Aluminum 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 Choil Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Choil Aluminum.
Diversification Opportunities for Samsung Electronics and Choil Aluminum
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Choil is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Choil Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choil Aluminum 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 Choil Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choil Aluminum has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Choil Aluminum go up and down completely randomly.
Pair Corralation between Samsung Electronics and Choil Aluminum
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Choil Aluminum. In addition to that, Samsung Electronics is 1.54 times more volatile than Choil Aluminum. It trades about -0.06 of its total potential returns per unit of risk. Choil Aluminum is currently generating about 0.23 per unit of volatility. If you would invest 141,400 in Choil Aluminum on November 3, 2024 and sell it today you would earn a total of 6,400 from holding Choil Aluminum or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Choil Aluminum
Performance |
| Timeline |
| Samsung Electronics |
| Choil Aluminum |
Samsung Electronics and Choil Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Choil Aluminum
The main advantage of trading using opposite Samsung Electronics and Choil Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Choil Aluminum 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 Choil Aluminum will offset losses from the drop in Choil Aluminum'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 |
| Choil Aluminum vs. Korea Investment Holdings | Choil Aluminum vs. Leaders Technology Investment | Choil Aluminum vs. Coloray International Investment | Choil Aluminum vs. SV Investment |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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