Correlation Between Samsung Electronics and UJU Electronics
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and UJU Electronics 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 UJU Electronics 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 UJU Electronics Co, you can compare the effects of market volatilities on Samsung Electronics and UJU Electronics 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 UJU Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and UJU Electronics.
Diversification Opportunities for Samsung Electronics and UJU Electronics
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and UJU is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and UJU Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UJU Electronics 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 UJU Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UJU Electronics has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and UJU Electronics go up and down completely randomly.
Pair Corralation between Samsung Electronics and UJU Electronics
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.12 times more return on investment than UJU Electronics. However, Samsung Electronics is 1.12 times more volatile than UJU Electronics Co. It trades about -0.04 of its potential returns per unit of risk. UJU Electronics Co is currently generating about -0.25 per unit of risk. If you would invest 5,040,000 in Samsung Electronics Co on August 24, 2024 and sell it today you would lose (160,000) from holding Samsung Electronics Co or give up 3.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. UJU Electronics Co
Performance |
| Timeline |
| Samsung Electronics |
| UJU Electronics |
Samsung Electronics and UJU Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and UJU Electronics
The main advantage of trading using opposite Samsung Electronics and UJU Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, UJU Electronics 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 UJU Electronics will offset losses from the drop in UJU Electronics' long position.| Samsung Electronics vs. FNSTech Co | Samsung Electronics vs. Vitzro Tech Co | Samsung Electronics vs. Air Busan Co | Samsung Electronics vs. CU Medical Systems |
| UJU Electronics vs. Seoul Semiconductor Co | UJU Electronics vs. SFA Engineering | UJU Electronics vs. Busan Industrial Co | UJU Electronics vs. Busan Ind |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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