Correlation Between Samsung Electronics and Mobile Appliance
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Mobile Appliance 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 Mobile Appliance 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 Mobile Appliance, you can compare the effects of market volatilities on Samsung Electronics and Mobile Appliance 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 Mobile Appliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Mobile Appliance.
Diversification Opportunities for Samsung Electronics and Mobile Appliance
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and Mobile is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Mobile Appliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Appliance 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 Mobile Appliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Appliance has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Mobile Appliance go up and down completely randomly.
Pair Corralation between Samsung Electronics and Mobile Appliance
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 5.4 times less return on investment than Mobile Appliance. But when comparing it to its historical volatility, Samsung Electronics Co is 1.31 times less risky than Mobile Appliance. It trades about 0.02 of its potential returns per unit of risk. Mobile Appliance is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 215,500 in Mobile Appliance on August 29, 2024 and sell it today you would earn a total of 11,000 from holding Mobile Appliance or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Mobile Appliance
Performance |
| Timeline |
| Samsung Electronics |
| Mobile Appliance |
Samsung Electronics and Mobile Appliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Mobile Appliance
The main advantage of trading using opposite Samsung Electronics and Mobile Appliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Mobile Appliance 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 Mobile Appliance will offset losses from the drop in Mobile Appliance's long position.| Samsung Electronics vs. Nice Information Telecommunication | Samsung Electronics vs. Mobile Appliance | Samsung Electronics vs. Korea Shipbuilding Offshore | Samsung Electronics vs. Daou Technology |
| Mobile Appliance vs. Automobile Pc | Mobile Appliance vs. Korean Reinsurance Co | Mobile Appliance vs. DSC Investment | Mobile Appliance vs. Stic Investments |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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