Correlation Between Samsung Electronics and Samick Musical
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Samick Musical 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 Samick Musical 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 Samick Musical Instruments, you can compare the effects of market volatilities on Samsung Electronics and Samick Musical 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 Samick Musical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Samick Musical.
Diversification Opportunities for Samsung Electronics and Samick Musical
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Samick is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Samick Musical Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samick Musical Instr 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 Samick Musical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samick Musical Instr has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Samick Musical go up and down completely randomly.
Pair Corralation between Samsung Electronics and Samick Musical
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 3.45 times more return on investment than Samick Musical. However, Samsung Electronics is 3.45 times more volatile than Samick Musical Instruments. It trades about 0.04 of its potential returns per unit of risk. Samick Musical Instruments is currently generating about 0.03 per unit of risk. If you would invest 4,475,000 in Samsung Electronics Co on September 13, 2024 and sell it today you would earn a total of 75,000 from holding Samsung Electronics Co or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Samick Musical Instruments
Performance |
| Timeline |
| Samsung Electronics |
| Samick Musical Instr |
Samsung Electronics and Samick Musical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Samick Musical
The main advantage of trading using opposite Samsung Electronics and Samick Musical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Samick Musical 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 Samick Musical will offset losses from the drop in Samick Musical'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 |
| Samick Musical vs. Samsung Electronics Co | Samick Musical vs. Samsung Electronics Co | Samick Musical vs. SK Hynix | Samick Musical 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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