Correlation Between Samsung Electronics and YG Entertainment
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and YG Entertainment 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 YG Entertainment 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 YG Entertainment, you can compare the effects of market volatilities on Samsung Electronics and YG Entertainment 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 YG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and YG Entertainment.
Diversification Opportunities for Samsung Electronics and YG Entertainment
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and 122870 is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and YG Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YG Entertainment 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 YG Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YG Entertainment has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and YG Entertainment go up and down completely randomly.
Pair Corralation between Samsung Electronics and YG Entertainment
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 38.22 times less return on investment than YG Entertainment. In addition to that, Samsung Electronics is 1.01 times more volatile than YG Entertainment. It trades about 0.01 of its total potential returns per unit of risk. YG Entertainment is currently generating about 0.3 per unit of volatility. If you would invest 4,040,000 in YG Entertainment on August 28, 2024 and sell it today you would earn a total of 790,000 from holding YG Entertainment or generate 19.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. YG Entertainment
Performance |
| Timeline |
| Samsung Electronics |
| YG Entertainment |
Samsung Electronics and YG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and YG Entertainment
The main advantage of trading using opposite Samsung Electronics and YG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, YG Entertainment 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 YG Entertainment will offset losses from the drop in YG Entertainment's long position.| Samsung Electronics vs. Lotte Fine Chemical | Samsung Electronics vs. SH Energy Chemical | Samsung Electronics vs. Hansol Chemical Co | Samsung Electronics vs. Youngchang Chemical Co |
| YG Entertainment vs. Samsung Electronics Co | YG Entertainment vs. Samsung Electronics Co | YG Entertainment vs. LG Energy Solution | YG Entertainment vs. SK Hynix |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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