Correlation Between Samsung Electronics and Sajo Ind
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sajo Ind 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 Sajo Ind 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 Sajo Ind, you can compare the effects of market volatilities on Samsung Electronics and Sajo Ind 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 Sajo Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sajo Ind.
Diversification Opportunities for Samsung Electronics and Sajo Ind
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Sajo is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sajo Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sajo Ind 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 Sajo Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sajo Ind has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sajo Ind go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sajo Ind
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Sajo Ind. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 2.32 times less risky than Sajo Ind. The stock trades about -0.04 of its potential returns per unit of risk. The Sajo Ind is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 4,280,000 in Sajo Ind on September 14, 2024 and sell it today you would lose (700,000) from holding Sajo Ind or give up 16.36% 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. Sajo Ind
Performance |
| Timeline |
| Samsung Electronics |
| Sajo Ind |
Samsung Electronics and Sajo Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Sajo Ind
The main advantage of trading using opposite Samsung Electronics and Sajo Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sajo Ind 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 Sajo Ind will offset losses from the drop in Sajo Ind's long position.| Samsung Electronics vs. Ssangyong Information Communication | Samsung Electronics vs. Woori Technology Investment | Samsung Electronics vs. Grand Korea Leisure | Samsung Electronics vs. Daelim Trading Co |
| Sajo Ind vs. Samsung Electronics Co | Sajo Ind vs. Samsung Electronics Co | Sajo Ind vs. LG Energy Solution | Sajo Ind vs. SK Hynix |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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