Correlation Between Samsung Electronics and Sangsangin Investment
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sangsangin Investment 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 Sangsangin Investment 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 Sangsangin Investment Securities, you can compare the effects of market volatilities on Samsung Electronics and Sangsangin Investment 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 Sangsangin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sangsangin Investment.
Diversification Opportunities for Samsung Electronics and Sangsangin Investment
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Sangsangin is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sangsangin Investment Securiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsangin Investment 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 Sangsangin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsangin Investment has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sangsangin Investment go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sangsangin Investment
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Sangsangin Investment. In addition to that, Samsung Electronics is 2.13 times more volatile than Sangsangin Investment Securities. It trades about -0.05 of its total potential returns per unit of risk. Sangsangin Investment Securities is currently generating about -0.08 per unit of volatility. If you would invest 44,700 in Sangsangin Investment Securities on September 2, 2024 and sell it today you would lose (1,100) from holding Sangsangin Investment Securities or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Sangsangin Investment Securiti
Performance |
| Timeline |
| Samsung Electronics |
| Sangsangin Investment |
Samsung Electronics and Sangsangin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Sangsangin Investment
The main advantage of trading using opposite Samsung Electronics and Sangsangin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sangsangin Investment 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 Sangsangin Investment will offset losses from the drop in Sangsangin Investment's long position.| Samsung Electronics vs. LG Corp | Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. Busan Ind | Samsung Electronics vs. Mirae Asset Daewoo |
| Sangsangin Investment vs. Samsung Electronics Co | Sangsangin Investment vs. Samsung Electronics Co | Sangsangin Investment vs. KB Financial Group | Sangsangin Investment vs. Shinhan Financial Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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