Correlation Between Samsung Electronics and DB Financial
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and DB Financial 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 DB Financial 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 DB Financial Investment, you can compare the effects of market volatilities on Samsung Electronics and DB Financial 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 DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and DB Financial.
Diversification Opportunities for Samsung Electronics and DB Financial
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and 016610 is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and DB Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Financial Investment 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 DB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Financial Investment has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and DB Financial go up and down completely randomly.
Pair Corralation between Samsung Electronics and DB Financial
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the DB Financial. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.06 times less risky than DB Financial. The stock trades about 0.0 of its potential returns per unit of risk. The DB Financial Investment is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 424,768 in DB Financial Investment on August 24, 2024 and sell it today you would earn a total of 85,232 from holding DB Financial Investment or generate 20.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. DB Financial Investment
Performance |
| Timeline |
| Samsung Electronics |
| DB Financial Investment |
Samsung Electronics and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and DB Financial
The main advantage of trading using opposite Samsung Electronics and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, DB Financial 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 DB Financial will offset losses from the drop in DB Financial's long position.| Samsung Electronics vs. Youl Chon Chemical | Samsung Electronics vs. Dongnam Chemical Co | Samsung Electronics vs. Korea Information Engineering | Samsung Electronics vs. NICE Information Service |
| DB Financial vs. PH Tech Co | DB Financial vs. BGF Retail Co | DB Financial vs. Korea Air Svc | DB Financial vs. SS TECH |
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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