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 Co is expected to under-perform the Mobile Appliance. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.36 times less risky than Mobile Appliance. The stock trades about -0.14 of its potential returns per unit of risk. The Mobile Appliance is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 209,000 in Mobile Appliance on November 3, 2024 and sell it today you would earn a total of 20,000 from holding Mobile Appliance or generate 9.57% 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. YG Entertainment | Samsung Electronics vs. Digital Multimedia Technology | Samsung Electronics vs. ECSTELECOM Co | Samsung Electronics vs. Kaonmedia Co |
| Mobile Appliance vs. Nable Communications | Mobile Appliance vs. Daishin Information Communications | Mobile Appliance vs. Choil Aluminum | Mobile Appliance vs. Inzi Display CoLtd |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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