Correlation Between Samsung Electronics and PLAYWITH
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and PLAYWITH 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 PLAYWITH 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 PLAYWITH, you can compare the effects of market volatilities on Samsung Electronics and PLAYWITH 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 PLAYWITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and PLAYWITH.
Diversification Opportunities for Samsung Electronics and PLAYWITH
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and PLAYWITH is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and PLAYWITH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWITH 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 PLAYWITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWITH has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and PLAYWITH go up and down completely randomly.
Pair Corralation between Samsung Electronics and PLAYWITH
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.86 times more return on investment than PLAYWITH. However, Samsung Electronics Co is 1.17 times less risky than PLAYWITH. It trades about -0.16 of its potential returns per unit of risk. PLAYWITH is currently generating about -0.22 per unit of risk. If you would invest 5,790,000 in Samsung Electronics Co on September 26, 2024 and sell it today you would lose (350,000) from holding Samsung Electronics Co or give up 6.04% 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. PLAYWITH
Performance |
| Timeline |
| Samsung Electronics |
| PLAYWITH |
Samsung Electronics and PLAYWITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and PLAYWITH
The main advantage of trading using opposite Samsung Electronics and PLAYWITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, PLAYWITH 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 PLAYWITH will offset losses from the drop in PLAYWITH's 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 |
| PLAYWITH vs. Daol Investment Securities | PLAYWITH vs. KPX Green Chemical | PLAYWITH vs. Youngbo Chemical Co | PLAYWITH vs. Kyung In Synthetic Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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