Correlation Between Samsung Electronics and Posco ICT
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Posco ICT 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 Posco ICT 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 Posco ICT, you can compare the effects of market volatilities on Samsung Electronics and Posco ICT 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 Posco ICT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Posco ICT.
Diversification Opportunities for Samsung Electronics and Posco ICT
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Posco is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Posco ICT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posco ICT 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 Posco ICT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posco ICT has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Posco ICT go up and down completely randomly.
Pair Corralation between Samsung Electronics and Posco ICT
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 83.2 times less return on investment than Posco ICT. But when comparing it to its historical volatility, Samsung Electronics Co is 2.91 times less risky than Posco ICT. It trades about 0.0 of its potential returns per unit of risk. Posco ICT is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 640,226 in Posco ICT on September 12, 2024 and sell it today you would earn a total of 1,479,774 from holding Posco ICT or generate 231.13% 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. Posco ICT
Performance |
| Timeline |
| Samsung Electronics |
| Posco ICT |
Samsung Electronics and Posco ICT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Posco ICT
The main advantage of trading using opposite Samsung Electronics and Posco ICT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Posco ICT 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 Posco ICT will offset losses from the drop in Posco ICT's long position.| Samsung Electronics vs. Cube Entertainment | Samsung Electronics vs. Dreamus Company | Samsung Electronics vs. LG Energy Solution | Samsung Electronics vs. Dongwon System |
| Posco ICT vs. SFA Engineering | Posco ICT vs. CJ ENM | Posco ICT vs. Paradise Co | Posco ICT vs. Seoul Semiconductor Co |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stocks Directory Find actively traded stocks across global markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |