Correlation Between Samsung Electronics and XIIlab
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and XIIlab 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 XIIlab 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 XIIlab Co, you can compare the effects of market volatilities on Samsung Electronics and XIIlab 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 XIIlab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and XIIlab.
Diversification Opportunities for Samsung Electronics and XIIlab
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and XIIlab is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and XIIlab Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XIIlab 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 XIIlab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XIIlab has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and XIIlab go up and down completely randomly.
Pair Corralation between Samsung Electronics and XIIlab
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.44 times more return on investment than XIIlab. However, Samsung Electronics Co is 2.27 times less risky than XIIlab. It trades about -0.04 of its potential returns per unit of risk. XIIlab Co is currently generating about -0.02 per unit of risk. If you would invest 7,013,304 in Samsung Electronics Co on September 2, 2024 and sell it today you would lose (1,593,304) from holding Samsung Electronics Co or give up 22.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. XIIlab Co
Performance |
| Timeline |
| Samsung Electronics |
| XIIlab |
Samsung Electronics and XIIlab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and XIIlab
The main advantage of trading using opposite Samsung Electronics and XIIlab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, XIIlab 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 XIIlab will offset losses from the drop in XIIlab's long position.| Samsung Electronics vs. Polaris Office Corp | Samsung Electronics vs. Lotte Data Communication | Samsung Electronics vs. Hankook Furniture Co | Samsung Electronics vs. Daou Data Corp |
| XIIlab vs. Samsung Electronics Co | XIIlab vs. Samsung Electronics Co | XIIlab vs. LG Energy Solution | XIIlab 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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