Correlation Between Samsung Electronics and Bosung Power
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Bosung Power 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 Bosung Power 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 Bosung Power Technology, you can compare the effects of market volatilities on Samsung Electronics and Bosung Power 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 Bosung Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Bosung Power.
Diversification Opportunities for Samsung Electronics and Bosung Power
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Bosung is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Bosung Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosung Power Technology 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 Bosung Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosung Power Technology has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Bosung Power go up and down completely randomly.
Pair Corralation between Samsung Electronics and Bosung Power
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.02 times more return on investment than Bosung Power. However, Samsung Electronics is 1.02 times more volatile than Bosung Power Technology. It trades about -0.03 of its potential returns per unit of risk. Bosung Power Technology is currently generating about -0.09 per unit of risk. If you would invest 5,090,000 in Samsung Electronics Co on August 29, 2024 and sell it today you would lose (190,000) from holding Samsung Electronics Co or give up 3.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Bosung Power Technology
Performance |
| Timeline |
| Samsung Electronics |
| Bosung Power Technology |
Samsung Electronics and Bosung Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Bosung Power
The main advantage of trading using opposite Samsung Electronics and Bosung Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Bosung Power 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 Bosung Power will offset losses from the drop in Bosung Power's long position.| Samsung Electronics vs. Nice Information Telecommunication | Samsung Electronics vs. Mobile Appliance | Samsung Electronics vs. Korea Shipbuilding Offshore | Samsung Electronics vs. Daou Technology |
| Bosung Power vs. Samsung Electronics Co | Bosung Power vs. Samsung Electronics Co | Bosung Power vs. KB Financial Group | Bosung Power 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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