Correlation Between Samsung Electronics and GeneBioTech
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and GeneBioTech 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 GeneBioTech 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 GeneBioTech Co, you can compare the effects of market volatilities on Samsung Electronics and GeneBioTech 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 GeneBioTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and GeneBioTech.
Diversification Opportunities for Samsung Electronics and GeneBioTech
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and GeneBioTech is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and GeneBioTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeneBioTech 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 GeneBioTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeneBioTech has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and GeneBioTech go up and down completely randomly.
Pair Corralation between Samsung Electronics and GeneBioTech
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.85 times more return on investment than GeneBioTech. However, Samsung Electronics Co is 1.18 times less risky than GeneBioTech. It trades about 0.0 of its potential returns per unit of risk. GeneBioTech Co is currently generating about -0.02 per unit of risk. If you would invest 4,996,575 in Samsung Electronics Co on December 11, 2024 and sell it today you would lose (446,575) from holding Samsung Electronics Co or give up 8.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. GeneBioTech Co
Performance |
| Timeline |
| Samsung Electronics |
| GeneBioTech |
Samsung Electronics and GeneBioTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and GeneBioTech
The main advantage of trading using opposite Samsung Electronics and GeneBioTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, GeneBioTech 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 GeneBioTech will offset losses from the drop in GeneBioTech's long position.| Samsung Electronics vs. Dongbu Insurance Co | Samsung Electronics vs. Phoenix Materials Co | Samsung Electronics vs. INNOX Advanced Materials | Samsung Electronics vs. Lotte Energy Materials |
| GeneBioTech vs. Kumho Petro Chemical | GeneBioTech vs. Hansol Chemical Co | GeneBioTech vs. Automobile Pc | GeneBioTech vs. SK Chemicals 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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