Correlation Between Samsung Electronics and SebitChem
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and SebitChem 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 SebitChem 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 SebitChem Co, you can compare the effects of market volatilities on Samsung Electronics and SebitChem 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 SebitChem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and SebitChem.
Diversification Opportunities for Samsung Electronics and SebitChem
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and SebitChem is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and SebitChem Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SebitChem 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 SebitChem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SebitChem has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and SebitChem go up and down completely randomly.
Pair Corralation between Samsung Electronics and SebitChem
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.88 times more return on investment than SebitChem. However, Samsung Electronics Co is 1.14 times less risky than SebitChem. It trades about -0.09 of its potential returns per unit of risk. SebitChem Co is currently generating about -0.37 per unit of risk. If you would invest 5,910,000 in Samsung Electronics Co on August 31, 2024 and sell it today you would lose (360,000) from holding Samsung Electronics Co or give up 6.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. SebitChem Co
Performance |
| Timeline |
| Samsung Electronics |
| SebitChem |
Samsung Electronics and SebitChem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and SebitChem
The main advantage of trading using opposite Samsung Electronics and SebitChem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, SebitChem 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 SebitChem will offset losses from the drop in SebitChem's long position.| Samsung Electronics vs. Dongsin Engineering Construction | Samsung Electronics vs. Doosan Fuel Cell | Samsung Electronics vs. Daishin Balance 1 | Samsung Electronics vs. Total Soft Bank |
| SebitChem vs. Korea Computer | SebitChem vs. Mgame Corp | SebitChem vs. Sangsin Energy Display | SebitChem vs. Sung Bo 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |