Correlation Between Samsung Electronics and Shinsegae Engineering
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Shinsegae 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 Shinsegae 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 Shinsegae Engineering Construction, you can compare the effects of market volatilities on Samsung Electronics and Shinsegae 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 Shinsegae Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Shinsegae Engineering.
Diversification Opportunities for Samsung Electronics and Shinsegae Engineering
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Shinsegae is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Shinsegae Engineering Construc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae 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 Shinsegae Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Engineering has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Shinsegae Engineering go up and down completely randomly.
Pair Corralation between Samsung Electronics and Shinsegae Engineering
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Shinsegae Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.57 times less risky than Shinsegae Engineering. The stock trades about -0.02 of its potential returns per unit of risk. The Shinsegae Engineering Construction is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,365,759 in Shinsegae Engineering Construction on September 12, 2024 and sell it today you would earn a total of 439,241 from holding Shinsegae Engineering Construction or generate 32.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Shinsegae Engineering Construc
Performance |
| Timeline |
| Samsung Electronics |
| Shinsegae Engineering |
Samsung Electronics and Shinsegae Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Shinsegae Engineering
The main advantage of trading using opposite Samsung Electronics and Shinsegae Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Shinsegae 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 Shinsegae Engineering will offset losses from the drop in Shinsegae Engineering's long position.| Samsung Electronics vs. Cube Entertainment | Samsung Electronics vs. Dreamus Company | Samsung Electronics vs. LG Energy Solution | Samsung Electronics vs. Dongwon System |
| Shinsegae Engineering vs. Samsung Electronics Co | Shinsegae Engineering vs. Samsung Electronics Co | Shinsegae Engineering vs. SK Hynix | Shinsegae Engineering vs. POSCO Holdings |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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