Correlation Between Samsung Electronics and APS Holdings
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and APS Holdings 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 APS Holdings 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 APS Holdings, you can compare the effects of market volatilities on Samsung Electronics and APS Holdings 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 APS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and APS Holdings.
Diversification Opportunities for Samsung Electronics and APS Holdings
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and APS is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and APS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APS Holdings 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 APS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APS Holdings has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and APS Holdings go up and down completely randomly.
Pair Corralation between Samsung Electronics and APS Holdings
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the APS Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.52 times less risky than APS Holdings. The stock trades about -0.04 of its potential returns per unit of risk. The APS Holdings is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 684,000 in APS Holdings on September 14, 2024 and sell it today you would lose (114,000) from holding APS Holdings or give up 16.67% 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. APS Holdings
Performance |
| Timeline |
| Samsung Electronics |
| APS Holdings |
Samsung Electronics and APS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and APS Holdings
The main advantage of trading using opposite Samsung Electronics and APS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, APS Holdings 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 APS Holdings will offset losses from the drop in APS Holdings' long position.| Samsung Electronics vs. Anam Electronics Co | Samsung Electronics vs. Daejoo Electronic Materials | Samsung Electronics vs. CG Hi Tech | Samsung Electronics vs. Samsung Electronics Co |
| APS Holdings vs. Cuckoo Homesys Co | APS Holdings vs. Kyung In Synthetic Corp | APS Holdings vs. Sung Bo Chemicals | APS Holdings vs. Kukdong Oil Chemicals |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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