Correlation Between Samsung Electronics and I Components
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and I Components 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 I Components 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 i Components Co, you can compare the effects of market volatilities on Samsung Electronics and I Components 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 I Components. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and I Components.
Diversification Opportunities for Samsung Electronics and I Components
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Samsung and 059100 is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and i Components Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on i Components 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 I Components. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of i Components has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and I Components go up and down completely randomly.
Pair Corralation between Samsung Electronics and I Components
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the I Components. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.2 times less risky than I Components. The stock trades about -0.02 of its potential returns per unit of risk. The i Components Co is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 470,000 in i Components Co on October 13, 2024 and sell it today you would earn a total of 68,000 from holding i Components Co or generate 14.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. i Components Co
Performance |
| Timeline |
| Samsung Electronics |
| i Components |
Samsung Electronics and I Components Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and I Components
The main advantage of trading using opposite Samsung Electronics and I Components positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, I Components 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 I Components will offset losses from the drop in I Components' long position.| Samsung Electronics vs. Cloud Air CoLtd | Samsung Electronics vs. Wireless Power Amplifier | Samsung Electronics vs. Polaris Office Corp | Samsung Electronics vs. Korea Air Svc |
| I Components vs. Atinum Investment Co | I Components vs. NICE Information Service | I Components vs. NH Investment Securities | I Components vs. Lotte Data Communication |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |