Correlation Between Samsung Electronics and Tplex
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Tplex 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 Tplex 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 Tplex Co, you can compare the effects of market volatilities on Samsung Electronics and Tplex 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 Tplex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Tplex.
Diversification Opportunities for Samsung Electronics and Tplex
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Tplex is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Tplex Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tplex 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 Tplex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tplex has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Tplex go up and down completely randomly.
Pair Corralation between Samsung Electronics and Tplex
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.84 times more return on investment than Tplex. However, Samsung Electronics Co is 1.19 times less risky than Tplex. It trades about 0.02 of its potential returns per unit of risk. Tplex Co is currently generating about -0.08 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Tplex Co
Performance |
| Timeline |
| Samsung Electronics |
| Tplex |
Samsung Electronics and Tplex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Tplex
The main advantage of trading using opposite Samsung Electronics and Tplex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Tplex 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 Tplex will offset losses from the drop in Tplex's long position.| Samsung Electronics vs. JYP Entertainment | Samsung Electronics vs. Samsung Heavy Industries | Samsung Electronics vs. Hanjinkal |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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