Correlation Between Samsung Electronics and LX Semicon
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and LX Semicon 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 LX Semicon 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 LX Semicon Co, you can compare the effects of market volatilities on Samsung Electronics and LX Semicon 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 LX Semicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and LX Semicon.
Diversification Opportunities for Samsung Electronics and LX Semicon
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and 108320 is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and LX Semicon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LX Semicon 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 LX Semicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LX Semicon has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and LX Semicon go up and down completely randomly.
Pair Corralation between Samsung Electronics and LX Semicon
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.23 times more return on investment than LX Semicon. However, Samsung Electronics is 1.23 times more volatile than LX Semicon Co. It trades about -0.02 of its potential returns per unit of risk. LX Semicon Co is currently generating about -0.18 per unit of risk. If you would invest 5,500,000 in Samsung Electronics Co on September 12, 2024 and sell it today you would lose (100,000) from holding Samsung Electronics Co or give up 1.82% 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. LX Semicon Co
Performance |
| Timeline |
| Samsung Electronics |
| LX Semicon |
Samsung Electronics and LX Semicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and LX Semicon
The main advantage of trading using opposite Samsung Electronics and LX Semicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, LX Semicon 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 LX Semicon will offset losses from the drop in LX Semicon's long position.| Samsung Electronics vs. Cube Entertainment | Samsung Electronics vs. Dreamus Company | Samsung Electronics vs. LG Energy Solution | Samsung Electronics vs. Dongwon System |
| LX Semicon vs. Hanshin Construction Co | LX Semicon vs. Samhwa Paint Industrial | LX Semicon vs. Myoung Shin Industrial | LX Semicon vs. MetaLabs Co |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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