Correlation Between Samsung Electronics and UIL
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and UIL 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 UIL 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 UIL Co, you can compare the effects of market volatilities on Samsung Electronics and UIL 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 UIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and UIL.
Diversification Opportunities for Samsung Electronics and UIL
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and UIL is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and UIL Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UIL Co 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 UIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UIL Co has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and UIL go up and down completely randomly.
Pair Corralation between Samsung Electronics and UIL
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.65 times more return on investment than UIL. However, Samsung Electronics Co is 1.55 times less risky than UIL. It trades about 0.17 of its potential returns per unit of risk. UIL Co is currently generating about 0.07 per unit of risk. If you would invest 4,265,000 in Samsung Electronics Co on September 14, 2024 and sell it today you would earn a total of 395,000 from holding Samsung Electronics Co or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. UIL Co
Performance |
| Timeline |
| Samsung Electronics |
| UIL Co |
Samsung Electronics and UIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and UIL
The main advantage of trading using opposite Samsung Electronics and UIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, UIL 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 UIL will offset losses from the drop in UIL's long position.| Samsung Electronics vs. Ssangyong Information Communication | Samsung Electronics vs. Woori Technology Investment | Samsung Electronics vs. Grand Korea Leisure | Samsung Electronics vs. Daelim Trading 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |