Correlation Between Samsung Electronics and IC Technology
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and IC Technology 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 IC Technology 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 IC Technology Co, you can compare the effects of market volatilities on Samsung Electronics and IC Technology 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 IC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and IC Technology.
Diversification Opportunities for Samsung Electronics and IC Technology
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and 052860 is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and IC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IC Technology 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 IC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IC Technology has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and IC Technology go up and down completely randomly.
Pair Corralation between Samsung Electronics and IC Technology
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the IC Technology. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.46 times less risky than IC Technology. The stock trades about -0.36 of its potential returns per unit of risk. The IC Technology Co is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 181,800 in IC Technology Co on November 7, 2024 and sell it today you would lose (4,800) from holding IC Technology Co or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Samsung Electronics Co vs. IC Technology Co
Performance |
| Timeline |
| Samsung Electronics |
| IC Technology |
Samsung Electronics and IC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and IC Technology
The main advantage of trading using opposite Samsung Electronics and IC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, IC Technology 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 IC Technology will offset losses from the drop in IC Technology's long position.| Samsung Electronics vs. Genie Music | Samsung Electronics vs. Seers Technology | Samsung Electronics vs. Cots Technology Co | Samsung Electronics vs. Daou Technology |
| IC Technology vs. Samsung Electronics Co | IC Technology vs. Samsung Electronics Co | IC Technology vs. Hyundai Motor Co | IC Technology vs. Hyundai Motor |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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