Correlation Between Samsung Electronics and Barunson Entertainment
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Barunson Entertainment 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 Barunson Entertainment 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 Barunson Entertainment Arts, you can compare the effects of market volatilities on Samsung Electronics and Barunson Entertainment 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 Barunson Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Barunson Entertainment.
Diversification Opportunities for Samsung Electronics and Barunson Entertainment
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Barunson is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Barunson Entertainment Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barunson Entertainment 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 Barunson Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barunson Entertainment has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Barunson Entertainment go up and down completely randomly.
Pair Corralation between Samsung Electronics and Barunson Entertainment
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.66 times more return on investment than Barunson Entertainment. However, Samsung Electronics Co is 1.51 times less risky than Barunson Entertainment. It trades about 0.01 of its potential returns per unit of risk. Barunson Entertainment Arts is currently generating about -0.05 per unit of risk. If you would invest 5,348,005 in Samsung Electronics Co on September 24, 2024 and sell it today you would lose (48,005) from holding Samsung Electronics Co or give up 0.9% 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. Barunson Entertainment Arts
Performance |
| Timeline |
| Samsung Electronics |
| Barunson Entertainment |
Samsung Electronics and Barunson Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Barunson Entertainment
The main advantage of trading using opposite Samsung Electronics and Barunson Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Barunson Entertainment 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 Barunson Entertainment will offset losses from the drop in Barunson Entertainment'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 |
| Barunson Entertainment vs. Samsung Electronics Co | Barunson Entertainment vs. Samsung Electronics Co | Barunson Entertainment vs. KB Financial Group | Barunson Entertainment vs. Shinhan Financial Group |
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.
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