Correlation Between Samsung Electronics and Ecoplastic
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Ecoplastic 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 Ecoplastic 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 Ecoplastic, you can compare the effects of market volatilities on Samsung Electronics and Ecoplastic 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 Ecoplastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Ecoplastic.
Diversification Opportunities for Samsung Electronics and Ecoplastic
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Ecoplastic is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Ecoplastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecoplastic 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 Ecoplastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecoplastic has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Ecoplastic go up and down completely randomly.
Pair Corralation between Samsung Electronics and Ecoplastic
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.43 times more return on investment than Ecoplastic. However, Samsung Electronics is 1.43 times more volatile than Ecoplastic. It trades about 0.02 of its potential returns per unit of risk. Ecoplastic is currently generating about -0.23 per unit of risk. If you would invest 4,880,000 in Samsung Electronics Co on August 29, 2024 and sell it today you would earn a total of 20,000 from holding Samsung Electronics Co or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Ecoplastic
Performance |
| Timeline |
| Samsung Electronics |
| Ecoplastic |
Samsung Electronics and Ecoplastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Ecoplastic
The main advantage of trading using opposite Samsung Electronics and Ecoplastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Ecoplastic 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 Ecoplastic will offset losses from the drop in Ecoplastic's long position.| Samsung Electronics vs. JYP Entertainment | Samsung Electronics vs. Samsung Heavy Industries | Samsung Electronics vs. Hanjinkal |
| Ecoplastic vs. Busan Industrial Co | Ecoplastic vs. Busan Ind | Ecoplastic vs. Mirae Asset Daewoo | Ecoplastic vs. UNISEM 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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