Correlation Between Samsung Electronics and SCI Information
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and SCI Information 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 SCI Information 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 SCI Information Service, you can compare the effects of market volatilities on Samsung Electronics and SCI Information 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 SCI Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and SCI Information.
Diversification Opportunities for Samsung Electronics and SCI Information
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and SCI is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and SCI Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Information Service 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 SCI Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Information Service has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and SCI Information go up and down completely randomly.
Pair Corralation between Samsung Electronics and SCI Information
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.23 times more return on investment than SCI Information. However, Samsung Electronics is 1.23 times more volatile than SCI Information Service. It trades about 0.02 of its potential returns per unit of risk. SCI Information Service is currently generating about -0.21 per unit of risk. If you would invest 4,880,000 in Samsung Electronics Co on August 28, 2024 and sell it today you would earn a total of 25,000 from holding Samsung Electronics Co or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. SCI Information Service
Performance |
| Timeline |
| Samsung Electronics |
| SCI Information Service |
Samsung Electronics and SCI Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and SCI Information
The main advantage of trading using opposite Samsung Electronics and SCI Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, SCI Information 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 SCI Information will offset losses from the drop in SCI Information's long position.| Samsung Electronics vs. JYP Entertainment | Samsung Electronics vs. Samsung Heavy Industries | Samsung Electronics vs. Hanjinkal |
| SCI Information vs. Korea New Network | SCI Information vs. Dong A Eltek | SCI Information vs. Dreamus Company | SCI Information vs. SK Bioscience Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |