Correlation Between Samsung Electronics and Samhwa Paint
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Samhwa Paint 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 Samhwa Paint 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 Samhwa Paint Industrial, you can compare the effects of market volatilities on Samsung Electronics and Samhwa Paint 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 Samhwa Paint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Samhwa Paint.
Diversification Opportunities for Samsung Electronics and Samhwa Paint
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Samsung and Samhwa is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Samhwa Paint Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhwa Paint Industrial 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 Samhwa Paint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhwa Paint Industrial has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Samhwa Paint go up and down completely randomly.
Pair Corralation between Samsung Electronics and Samhwa Paint
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Samhwa Paint. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.98 times less risky than Samhwa Paint. The stock trades about -0.02 of its potential returns per unit of risk. The Samhwa Paint Industrial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 582,084 in Samhwa Paint Industrial on September 12, 2024 and sell it today you would earn a total of 41,916 from holding Samhwa Paint Industrial or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Samhwa Paint Industrial
Performance |
| Timeline |
| Samsung Electronics |
| Samhwa Paint Industrial |
Samsung Electronics and Samhwa Paint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Samhwa Paint
The main advantage of trading using opposite Samsung Electronics and Samhwa Paint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Samhwa Paint 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 Samhwa Paint will offset losses from the drop in Samhwa Paint's long position.| Samsung Electronics vs. LG Corp | Samsung Electronics vs. Solution Advanced Technology | Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. Busan Ind |
| Samhwa Paint vs. Samsung Electronics Co | Samhwa Paint vs. Samsung Electronics Co | Samhwa Paint vs. SK Hynix | Samhwa Paint vs. POSCO Holdings |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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