Correlation Between Samsung Electronics and Samsung Publishing
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Samsung Publishing 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 Samsung Publishing 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 Samsung Publishing Co, you can compare the effects of market volatilities on Samsung Electronics and Samsung Publishing 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 Samsung Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Samsung Publishing.
Diversification Opportunities for Samsung Electronics and Samsung Publishing
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samsung and Samsung is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Samsung Publishing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Publishing 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 Samsung Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Publishing has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Samsung Publishing go up and down completely randomly.
Pair Corralation between Samsung Electronics and Samsung Publishing
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Samsung Publishing. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 2.12 times less risky than Samsung Publishing. The stock trades about -0.02 of its potential returns per unit of risk. The Samsung Publishing Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,729,873 in Samsung Publishing Co on September 12, 2024 and sell it today you would lose (219,873) from holding Samsung Publishing Co or give up 12.71% 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. Samsung Publishing Co
Performance |
| Timeline |
| Samsung Electronics |
| Samsung Publishing |
Samsung Electronics and Samsung Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Samsung Publishing
The main advantage of trading using opposite Samsung Electronics and Samsung Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Samsung Publishing 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 Samsung Publishing will offset losses from the drop in Samsung Publishing's long position.| Samsung Electronics vs. Cube Entertainment | Samsung Electronics vs. Dreamus Company | Samsung Electronics vs. LG Energy Solution | Samsung Electronics vs. Dongwon System |
| Samsung Publishing vs. Samsung Electronics Co | Samsung Publishing vs. Samsung Electronics Co | Samsung Publishing vs. SK Hynix | Samsung Publishing vs. POSCO Holdings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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