Correlation Between Samsung Electronics and Sungwoo Electronics
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sungwoo Electronics 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 Sungwoo Electronics 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 Sungwoo Electronics Co, you can compare the effects of market volatilities on Samsung Electronics and Sungwoo Electronics 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 Sungwoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sungwoo Electronics.
Diversification Opportunities for Samsung Electronics and Sungwoo Electronics
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Samsung and Sungwoo is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sungwoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungwoo Electronics 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 Sungwoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungwoo Electronics has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sungwoo Electronics go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sungwoo Electronics
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 5.93 times less return on investment than Sungwoo Electronics. But when comparing it to its historical volatility, Samsung Electronics Co is 1.56 times less risky than Sungwoo Electronics. It trades about 0.01 of its potential returns per unit of risk. Sungwoo Electronics Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 257,094 in Sungwoo Electronics Co on September 14, 2024 and sell it today you would earn a total of 90,406 from holding Sungwoo Electronics Co or generate 35.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.63% |
| Values | Daily Returns |
Samsung Electronics Co vs. Sungwoo Electronics Co
Performance |
| Timeline |
| Samsung Electronics |
| Sungwoo Electronics |
Samsung Electronics and Sungwoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Sungwoo Electronics
The main advantage of trading using opposite Samsung Electronics and Sungwoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sungwoo Electronics 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 Sungwoo Electronics will offset losses from the drop in Sungwoo Electronics' 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 |
| Sungwoo Electronics vs. Samsung Electronics Co | Sungwoo Electronics vs. Samsung Electronics Co | Sungwoo Electronics vs. SK Hynix | Sungwoo Electronics 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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