Correlation Between Samsung Electronics and Suprema
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Suprema 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 Suprema 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 Suprema, you can compare the effects of market volatilities on Samsung Electronics and Suprema 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 Suprema. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Suprema.
Diversification Opportunities for Samsung Electronics and Suprema
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Suprema is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Suprema in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suprema 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 Suprema. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suprema has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Suprema go up and down completely randomly.
Pair Corralation between Samsung Electronics and Suprema
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.7 times more return on investment than Suprema. However, Samsung Electronics is 1.7 times more volatile than Suprema. It trades about 0.19 of its potential returns per unit of risk. Suprema is currently generating about 0.23 per unit of risk. If you would invest 5,060,000 in Samsung Electronics Co on September 14, 2024 and sell it today you would earn a total of 530,000 from holding Samsung Electronics Co or generate 10.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Suprema
Performance |
| Timeline |
| Samsung Electronics |
| Suprema |
Samsung Electronics and Suprema Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Suprema
The main advantage of trading using opposite Samsung Electronics and Suprema positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Suprema 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 Suprema will offset losses from the drop in Suprema's long position.| Samsung Electronics vs. Anam Electronics Co | Samsung Electronics vs. Daejoo Electronic Materials | Samsung Electronics vs. CG Hi Tech | Samsung Electronics vs. Samsung Electronics Co |
| Suprema vs. Cube Entertainment | Suprema vs. Dreamus Company | Suprema vs. LG Energy Solution | Suprema vs. Dongwon System |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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