Correlation Between Samsung Electronics and SBI Investment
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and SBI Investment 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 SBI Investment 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 SBI Investment KOREA, you can compare the effects of market volatilities on Samsung Electronics and SBI Investment 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 SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and SBI Investment.
Diversification Opportunities for Samsung Electronics and SBI Investment
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and SBI is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and SBI Investment KOREA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Investment KOREA 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 SBI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Investment KOREA has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and SBI Investment go up and down completely randomly.
Pair Corralation between Samsung Electronics and SBI Investment
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the SBI Investment. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.37 times less risky than SBI Investment. The stock trades about -0.03 of its potential returns per unit of risk. The SBI Investment KOREA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 82,600 in SBI Investment KOREA on September 2, 2024 and sell it today you would lose (9,700) from holding SBI Investment KOREA or give up 11.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. SBI Investment KOREA
Performance |
| Timeline |
| Samsung Electronics |
| SBI Investment KOREA |
Samsung Electronics and SBI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and SBI Investment
The main advantage of trading using opposite Samsung Electronics and SBI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, SBI Investment 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 SBI Investment will offset losses from the drop in SBI Investment's long position.| Samsung Electronics vs. LG Corp | Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. Busan Ind | Samsung Electronics vs. Mirae Asset Daewoo |
| SBI Investment vs. Samsung Electronics Co | SBI Investment vs. Samsung Electronics Co | SBI Investment vs. KB Financial Group | SBI Investment 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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