Correlation Between Samsung Electronics and Xavis
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Xavis 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 Xavis 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 Xavis Co, you can compare the effects of market volatilities on Samsung Electronics and Xavis 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 Xavis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Xavis.
Diversification Opportunities for Samsung Electronics and Xavis
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Xavis is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Xavis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xavis 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 Xavis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xavis has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Xavis go up and down completely randomly.
Pair Corralation between Samsung Electronics and Xavis
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Xavis. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.39 times less risky than Xavis. The stock trades about -0.05 of its potential returns per unit of risk. The Xavis Co is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 129,700 in Xavis Co on November 3, 2024 and sell it today you would earn a total of 13,300 from holding Xavis Co or generate 10.25% 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. Xavis Co
Performance |
| Timeline |
| Samsung Electronics |
| Xavis |
Samsung Electronics and Xavis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Xavis
The main advantage of trading using opposite Samsung Electronics and Xavis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Xavis 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 Xavis will offset losses from the drop in Xavis' long position.| Samsung Electronics vs. Sangsin Energy Display | Samsung Electronics vs. Display Tech Co | Samsung Electronics vs. Iljin Display | Samsung Electronics vs. ITM Semiconductor Co |
| Xavis vs. Kukdong Oil Chemicals | Xavis vs. LG Display Co | Xavis vs. Digital Power Communications | Xavis vs. Alton Sports CoLtd |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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