Correlation Between Samsung Electronics and Elentec
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Elentec 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 Elentec 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 Elentec Co, you can compare the effects of market volatilities on Samsung Electronics and Elentec 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 Elentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Elentec.
Diversification Opportunities for Samsung Electronics and Elentec
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Elentec is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Elentec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elentec 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 Elentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elentec has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Elentec go up and down completely randomly.
Pair Corralation between Samsung Electronics and Elentec
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.54 times more return on investment than Elentec. However, Samsung Electronics Co is 1.84 times less risky than Elentec. It trades about -0.01 of its potential returns per unit of risk. Elentec Co is currently generating about -0.04 per unit of risk. If you would invest 5,164,599 in Samsung Electronics Co on September 2, 2024 and sell it today you would lose (544,599) from holding Samsung Electronics Co or give up 10.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Elentec Co
Performance |
| Timeline |
| Samsung Electronics |
| Elentec |
Samsung Electronics and Elentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Elentec
The main advantage of trading using opposite Samsung Electronics and Elentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Elentec 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 Elentec will offset losses from the drop in Elentec'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 |
| Elentec vs. Korea New Network | Elentec vs. ICD Co | Elentec vs. DYPNF CoLtd | Elentec vs. Busan Industrial 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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