Correlation Between Samsung Electronics and Tuksu Engineering
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Tuksu Engineering 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 Tuksu Engineering 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 Tuksu Engineering ConstructionLtd, you can compare the effects of market volatilities on Samsung Electronics and Tuksu Engineering 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 Tuksu Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Tuksu Engineering.
Diversification Opportunities for Samsung Electronics and Tuksu Engineering
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Tuksu is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Tuksu Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tuksu Engineering 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 Tuksu Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tuksu Engineering has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Tuksu Engineering go up and down completely randomly.
Pair Corralation between Samsung Electronics and Tuksu Engineering
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Tuksu Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.51 times less risky than Tuksu Engineering. The stock trades about -0.18 of its potential returns per unit of risk. The Tuksu Engineering ConstructionLtd is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 646,000 in Tuksu Engineering ConstructionLtd on August 28, 2024 and sell it today you would lose (15,000) from holding Tuksu Engineering ConstructionLtd or give up 2.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Tuksu Engineering Construction
Performance |
| Timeline |
| Samsung Electronics |
| Tuksu Engineering |
Samsung Electronics and Tuksu Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Tuksu Engineering
The main advantage of trading using opposite Samsung Electronics and Tuksu Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Tuksu Engineering 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 Tuksu Engineering will offset losses from the drop in Tuksu Engineering's long position.| Samsung Electronics vs. Lotte Fine Chemical | Samsung Electronics vs. SH Energy Chemical | Samsung Electronics vs. Hansol Chemical Co | Samsung Electronics vs. Youngchang Chemical Co |
| Tuksu Engineering vs. Samsung Electronics Co | Tuksu Engineering vs. Samsung Electronics Co | Tuksu Engineering vs. Hyundai Motor Co | Tuksu Engineering vs. Hyundai Motor |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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