Correlation Between Samsung Electronics and Seojin Automotive
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Seojin Automotive 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 Seojin Automotive 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 Seojin Automotive CoLtd, you can compare the effects of market volatilities on Samsung Electronics and Seojin Automotive 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 Seojin Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Seojin Automotive.
Diversification Opportunities for Samsung Electronics and Seojin Automotive
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Seojin is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Seojin Automotive CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seojin Automotive CoLtd 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 Seojin Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seojin Automotive CoLtd has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Seojin Automotive go up and down completely randomly.
Pair Corralation between Samsung Electronics and Seojin Automotive
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.97 times more return on investment than Seojin Automotive. However, Samsung Electronics Co is 1.03 times less risky than Seojin Automotive. It trades about -0.11 of its potential returns per unit of risk. Seojin Automotive CoLtd is currently generating about -0.17 per unit of risk. If you would invest 7,662,637 in Samsung Electronics Co on September 3, 2024 and sell it today you would lose (2,242,637) from holding Samsung Electronics Co or give up 29.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Seojin Automotive CoLtd
Performance |
| Timeline |
| Samsung Electronics |
| Seojin Automotive CoLtd |
Samsung Electronics and Seojin Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Seojin Automotive
The main advantage of trading using opposite Samsung Electronics and Seojin Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Seojin Automotive 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 Seojin Automotive will offset losses from the drop in Seojin Automotive's long position.| Samsung Electronics vs. Hanjoo Light Metal | Samsung Electronics vs. Taeyang Metal Industrial | Samsung Electronics vs. Daejung Chemicals Metals | Samsung Electronics vs. Youngsin Metal Industrial |
| Seojin Automotive vs. Korea Real Estate | Seojin Automotive vs. Busan Industrial Co | Seojin Automotive vs. UNISEM Co | Seojin Automotive vs. RPBio Inc |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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