Correlation Between Samsung Electronics and Orbitech
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Orbitech 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 Orbitech 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 Orbitech Co, you can compare the effects of market volatilities on Samsung Electronics and Orbitech 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 Orbitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Orbitech.
Diversification Opportunities for Samsung Electronics and Orbitech
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samsung and Orbitech is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Orbitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbitech 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 Orbitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbitech has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Orbitech go up and down completely randomly.
Pair Corralation between Samsung Electronics and Orbitech
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.0 times more return on investment than Orbitech. However, Samsung Electronics is 1.0 times more volatile than Orbitech Co. It trades about 0.0 of its potential returns per unit of risk. Orbitech Co is currently generating about -0.06 per unit of risk. If you would invest 5,660,000 in Samsung Electronics Co on August 25, 2024 and sell it today you would lose (60,000) from holding Samsung Electronics Co or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Orbitech Co
Performance |
| Timeline |
| Samsung Electronics |
| Orbitech |
Samsung Electronics and Orbitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Orbitech
The main advantage of trading using opposite Samsung Electronics and Orbitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Orbitech 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 Orbitech will offset losses from the drop in Orbitech's long position.| Samsung Electronics vs. Sam Yang Foods | Samsung Electronics vs. Lotte Chilsung Beverage | Samsung Electronics vs. DONGKUK TED METAL | Samsung Electronics vs. E Investment Development |
| Orbitech vs. Samsung Electronics Co | Orbitech vs. Samsung Electronics Co | Orbitech vs. Hyundai Motor Co | Orbitech vs. Hyundai Motor |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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