Correlation Between Samsung Electronics and Daeduck Electronics
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Daeduck Electronics 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 Daeduck Electronics 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 Daeduck Electronics Co, you can compare the effects of market volatilities on Samsung Electronics and Daeduck Electronics 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 Daeduck Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Daeduck Electronics.
Diversification Opportunities for Samsung Electronics and Daeduck Electronics
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Daeduck is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Daeduck Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daeduck Electronics 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 Daeduck Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daeduck Electronics has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Daeduck Electronics go up and down completely randomly.
Pair Corralation between Samsung Electronics and Daeduck Electronics
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 2.54 times more return on investment than Daeduck Electronics. However, Samsung Electronics is 2.54 times more volatile than Daeduck Electronics Co. It trades about 0.16 of its potential returns per unit of risk. Daeduck Electronics Co is currently generating about 0.13 per unit of risk. If you would invest 4,295,000 in Samsung Electronics Co on September 15, 2024 and sell it today you would earn a total of 365,000 from holding Samsung Electronics Co or generate 8.5% 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. Daeduck Electronics Co
Performance |
| Timeline |
| Samsung Electronics |
| Daeduck Electronics |
Samsung Electronics and Daeduck Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Daeduck Electronics
The main advantage of trading using opposite Samsung Electronics and Daeduck Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Daeduck Electronics 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 Daeduck Electronics will offset losses from the drop in Daeduck Electronics' long position.| Samsung Electronics vs. LG Corp | Samsung Electronics vs. Solution Advanced Technology | Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. Busan Ind |
| Daeduck Electronics vs. Samsung Electronics Co | Daeduck Electronics vs. Samsung Electronics Co | Daeduck Electronics vs. SK Hynix | Daeduck Electronics 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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