Correlation Between Samsung Electronics and Cosmax
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Cosmax 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 Cosmax 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 Cosmax Inc, you can compare the effects of market volatilities on Samsung Electronics and Cosmax 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 Cosmax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Cosmax.
Diversification Opportunities for Samsung Electronics and Cosmax
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Cosmax is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Cosmax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmax Inc 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 Cosmax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmax Inc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Cosmax go up and down completely randomly.
Pair Corralation between Samsung Electronics and Cosmax
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.8 times more return on investment than Cosmax. However, Samsung Electronics Co is 1.25 times less risky than Cosmax. It trades about 0.01 of its potential returns per unit of risk. Cosmax Inc is currently generating about -0.02 per unit of risk. If you would invest 5,810,000 in Samsung Electronics Co on August 28, 2024 and sell it today you would lose (20,000) from holding Samsung Electronics Co or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Cosmax Inc
Performance |
| Timeline |
| Samsung Electronics |
| Cosmax Inc |
Samsung Electronics and Cosmax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Cosmax
The main advantage of trading using opposite Samsung Electronics and Cosmax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Cosmax 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 Cosmax will offset losses from the drop in Cosmax's long position.| Samsung Electronics vs. Korea Real Estate | Samsung Electronics vs. Korea Ratings Co | Samsung Electronics vs. IQuest Co | Samsung Electronics vs. Wonbang Tech Co |
| Cosmax vs. Korea Investment Holdings | Cosmax vs. Lotte Energy Materials | Cosmax vs. Hyundai Engineering Plastics | Cosmax vs. RF Materials 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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