Correlation Between Samsung Electronics and InfoBank
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and InfoBank 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 InfoBank 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 InfoBank, you can compare the effects of market volatilities on Samsung Electronics and InfoBank 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 InfoBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and InfoBank.
Diversification Opportunities for Samsung Electronics and InfoBank
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and InfoBank is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and InfoBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfoBank 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 InfoBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfoBank has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and InfoBank go up and down completely randomly.
Pair Corralation between Samsung Electronics and InfoBank
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.49 times more return on investment than InfoBank. However, Samsung Electronics Co is 2.04 times less risky than InfoBank. It trades about -0.01 of its potential returns per unit of risk. InfoBank is currently generating about -0.01 per unit of risk. If you would invest 6,158,894 in Samsung Electronics Co on October 25, 2024 and sell it today you would lose (788,894) from holding Samsung Electronics Co or give up 12.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. InfoBank
Performance |
| Timeline |
| Samsung Electronics |
| InfoBank |
Samsung Electronics and InfoBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and InfoBank
The main advantage of trading using opposite Samsung Electronics and InfoBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, InfoBank 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 InfoBank will offset losses from the drop in InfoBank's long position.| Samsung Electronics vs. Kbi Metal Co | Samsung Electronics vs. Jahwa Electronics Co | Samsung Electronics vs. Heungkuk Metaltech CoLtd | Samsung Electronics vs. Shinhan Inverse Copper |
| InfoBank vs. Samsung Electronics Co | InfoBank vs. Samsung Electronics Co | InfoBank vs. SK Hynix | InfoBank vs. HMM 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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