Correlation Between Samsung Electronics and ChipsMedia
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and ChipsMedia 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 ChipsMedia 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 ChipsMedia, you can compare the effects of market volatilities on Samsung Electronics and ChipsMedia 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 ChipsMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and ChipsMedia.
Diversification Opportunities for Samsung Electronics and ChipsMedia
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and ChipsMedia is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and ChipsMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipsMedia 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 ChipsMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChipsMedia has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and ChipsMedia go up and down completely randomly.
Pair Corralation between Samsung Electronics and ChipsMedia
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the ChipsMedia. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 2.1 times less risky than ChipsMedia. The stock trades about -0.07 of its potential returns per unit of risk. The ChipsMedia is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 3,100,000 in ChipsMedia on November 5, 2024 and sell it today you would lose (1,136,000) from holding ChipsMedia or give up 36.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. ChipsMedia
Performance |
| Timeline |
| Samsung Electronics |
| ChipsMedia |
Samsung Electronics and ChipsMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and ChipsMedia
The main advantage of trading using opposite Samsung Electronics and ChipsMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, ChipsMedia 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 ChipsMedia will offset losses from the drop in ChipsMedia's long position.| Samsung Electronics vs. GS Retail Co | Samsung Electronics vs. Hanwha Life Insurance | Samsung Electronics vs. SK Telecom Co | Samsung Electronics vs. Daishin Information Communications |
| ChipsMedia vs. Shinhan Financial Group | ChipsMedia vs. DB Insurance Co | ChipsMedia vs. Daejung Chemicals Metals | ChipsMedia vs. Kukdo Chemical 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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