Correlation Between Samsung Electronics and Asia Technology
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Asia Technology 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 Asia Technology 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 Asia Technology Co, you can compare the effects of market volatilities on Samsung Electronics and Asia Technology 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 Asia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Asia Technology.
Diversification Opportunities for Samsung Electronics and Asia Technology
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and Asia is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Asia Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Technology 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 Asia Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Technology has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Asia Technology go up and down completely randomly.
Pair Corralation between Samsung Electronics and Asia Technology
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 2.35 times less return on investment than Asia Technology. In addition to that, Samsung Electronics is 1.28 times more volatile than Asia Technology Co. It trades about 0.02 of its total potential returns per unit of risk. Asia Technology Co is currently generating about 0.06 per unit of volatility. If you would invest 220,000 in Asia Technology Co on August 29, 2024 and sell it today you would earn a total of 5,000 from holding Asia Technology Co or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Asia Technology Co
Performance |
| Timeline |
| Samsung Electronics |
| Asia Technology |
Samsung Electronics and Asia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Asia Technology
The main advantage of trading using opposite Samsung Electronics and Asia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Asia Technology 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 Asia Technology will offset losses from the drop in Asia Technology's long position.| Samsung Electronics vs. Chin Yang Chemical | Samsung Electronics vs. Dongbang Transport Logistics | Samsung Electronics vs. Shinhan Inverse Silver | Samsung Electronics vs. JC Chemical Co |
| Asia Technology vs. Jeju Bank | Asia Technology vs. Seoyon Topmetal Co | Asia Technology vs. MetaLabs Co | Asia Technology vs. KakaoBank Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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