Correlation Between Samsung Electronics and Sang A
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sang A 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 Sang A 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 Sang A Frontec CoLtd, you can compare the effects of market volatilities on Samsung Electronics and Sang A 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 Sang A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sang A.
Diversification Opportunities for Samsung Electronics and Sang A
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Sang is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sang A Frontec CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sang A Frontec 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 Sang A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sang A Frontec has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sang A go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sang A
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Sang A. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.4 times less risky than Sang A. The stock trades about -0.25 of its potential returns per unit of risk. The Sang A Frontec CoLtd is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,975,000 in Sang A Frontec CoLtd on September 24, 2024 and sell it today you would lose (45,000) from holding Sang A Frontec CoLtd or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Samsung Electronics Co vs. Sang A Frontec CoLtd
Performance |
| Timeline |
| Samsung Electronics |
| Sang A Frontec |
Samsung Electronics and Sang A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Sang A
The main advantage of trading using opposite Samsung Electronics and Sang A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sang A 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 Sang A will offset losses from the drop in Sang A's long position.| Samsung Electronics vs. LG Corp | Samsung Electronics vs. Zinus Inc | Samsung Electronics vs. Humasis Co | Samsung Electronics vs. JYP Entertainment |
| Sang A vs. Dongsin Engineering Construction | Sang A vs. Doosan Fuel Cell | Sang A vs. Daishin Balance 1 | Sang A vs. Total Soft Bank |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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