Correlation Between Samsung Electronics and InBody CoLtd
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and InBody CoLtd 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 InBody CoLtd 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 InBody CoLtd, you can compare the effects of market volatilities on Samsung Electronics and InBody CoLtd 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 InBody CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and InBody CoLtd.
Diversification Opportunities for Samsung Electronics and InBody CoLtd
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and InBody is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and InBody CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InBody CoLtd 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 InBody CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InBody CoLtd has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and InBody CoLtd go up and down completely randomly.
Pair Corralation between Samsung Electronics and InBody CoLtd
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.17 times more return on investment than InBody CoLtd. However, Samsung Electronics is 1.17 times more volatile than InBody CoLtd. It trades about -0.02 of its potential returns per unit of risk. InBody CoLtd is currently generating about -0.17 per unit of risk. If you would invest 5,500,000 in Samsung Electronics Co on September 12, 2024 and sell it today you would lose (100,000) from holding Samsung Electronics Co or give up 1.82% 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. InBody CoLtd
Performance |
| Timeline |
| Samsung Electronics |
| InBody CoLtd |
Samsung Electronics and InBody CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and InBody CoLtd
The main advantage of trading using opposite Samsung Electronics and InBody CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, InBody CoLtd 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 InBody CoLtd will offset losses from the drop in InBody CoLtd's long position.| Samsung Electronics vs. Cube Entertainment | Samsung Electronics vs. Dreamus Company | Samsung Electronics vs. LG Energy Solution | Samsung Electronics vs. Dongwon System |
| InBody CoLtd vs. Samsung Electronics Co | InBody CoLtd vs. Samsung Electronics Co | InBody CoLtd vs. SK Hynix | InBody CoLtd vs. SK Holdings 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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