Correlation Between Samsung Electronics and Green Cross
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Green Cross 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 Green Cross 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 Green Cross Medical, you can compare the effects of market volatilities on Samsung Electronics and Green Cross 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 Green Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Green Cross.
Diversification Opportunities for Samsung Electronics and Green Cross
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Green is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Green Cross Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cross Medical 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 Green Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cross Medical has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Green Cross go up and down completely randomly.
Pair Corralation between Samsung Electronics and Green Cross
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.46 times more return on investment than Green Cross. However, Samsung Electronics is 1.46 times more volatile than Green Cross Medical. It trades about -0.12 of its potential returns per unit of risk. Green Cross Medical is currently generating about -0.27 per unit of risk. If you would invest 5,920,000 in Samsung Electronics Co on September 1, 2024 and sell it today you would lose (500,000) from holding Samsung Electronics Co or give up 8.45% 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. Green Cross Medical
Performance |
| Timeline |
| Samsung Electronics |
| Green Cross Medical |
Samsung Electronics and Green Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Green Cross
The main advantage of trading using opposite Samsung Electronics and Green Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Green Cross 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 Green Cross will offset losses from the drop in Green Cross' long position.| Samsung Electronics vs. Konan Technology | Samsung Electronics vs. Orbitech Co | Samsung Electronics vs. Netmarble Games Corp | Samsung Electronics vs. Golden Bridge Investment |
| Green Cross vs. AptaBio Therapeutics | Green Cross vs. KT Hitel | Green Cross vs. SillaJen | Green Cross vs. Cytogen |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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