Correlation Between Samsung Electronics and Aurora World
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Aurora World 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 Aurora World 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 Aurora World, you can compare the effects of market volatilities on Samsung Electronics and Aurora World 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 Aurora World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Aurora World.
Diversification Opportunities for Samsung Electronics and Aurora World
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Aurora is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Aurora World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora World 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 Aurora World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora World has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Aurora World go up and down completely randomly.
Pair Corralation between Samsung Electronics and Aurora World
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Aurora World. In addition to that, Samsung Electronics is 1.08 times more volatile than Aurora World. It trades about -0.02 of its total potential returns per unit of risk. Aurora World is currently generating about 0.18 per unit of volatility. If you would invest 561,000 in Aurora World on September 12, 2024 and sell it today you would earn a total of 59,000 from holding Aurora World or generate 10.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. Aurora World
Performance |
| Timeline |
| Samsung Electronics |
| Aurora World |
Samsung Electronics and Aurora World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Aurora World
The main advantage of trading using opposite Samsung Electronics and Aurora World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Aurora World 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 Aurora World will offset losses from the drop in Aurora World's long position.| Samsung Electronics vs. Cube Entertainment | Samsung Electronics vs. Dreamus Company | Samsung Electronics vs. LG Energy Solution | Samsung Electronics vs. Dongwon System |
| Aurora World vs. Ssangyong Information Communication | Aurora World vs. PJ Metal Co | Aurora World vs. CG Hi Tech | Aurora World vs. Korea Computer |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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