Correlation Between Samsung Electronics and Taeyang Metal
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Taeyang Metal 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 Taeyang Metal 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 Taeyang Metal Industrial, you can compare the effects of market volatilities on Samsung Electronics and Taeyang Metal 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 Taeyang Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Taeyang Metal.
Diversification Opportunities for Samsung Electronics and Taeyang Metal
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Taeyang is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Taeyang Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taeyang Metal 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 Taeyang Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taeyang Metal Industrial has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Taeyang Metal go up and down completely randomly.
Pair Corralation between Samsung Electronics and Taeyang Metal
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 3.54 times less return on investment than Taeyang Metal. But when comparing it to its historical volatility, Samsung Electronics Co is 3.43 times less risky than Taeyang Metal. It trades about 0.04 of its potential returns per unit of risk. Taeyang Metal Industrial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 496,000 in Taeyang Metal Industrial on September 13, 2024 and sell it today you would earn a total of 2,500 from holding Taeyang Metal Industrial or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Taeyang Metal Industrial
Performance |
| Timeline |
| Samsung Electronics |
| Taeyang Metal Industrial |
Samsung Electronics and Taeyang Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Taeyang Metal
The main advantage of trading using opposite Samsung Electronics and Taeyang Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Taeyang Metal 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 Taeyang Metal will offset losses from the drop in Taeyang Metal'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 |
| Taeyang Metal vs. Samsung Electronics Co | Taeyang Metal vs. Samsung Electronics Co | Taeyang Metal vs. SK Hynix | Taeyang Metal 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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