Correlation Between Samsung Electronics and Worldex Industry
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Worldex Industry 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 Worldex Industry 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 Worldex Industry Trading, you can compare the effects of market volatilities on Samsung Electronics and Worldex Industry 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 Worldex Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Worldex Industry.
Diversification Opportunities for Samsung Electronics and Worldex Industry
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Worldex is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Worldex Industry Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worldex Industry Trading 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 Worldex Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worldex Industry Trading has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Worldex Industry go up and down completely randomly.
Pair Corralation between Samsung Electronics and Worldex Industry
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Worldex Industry. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.23 times less risky than Worldex Industry. The stock trades about -0.14 of its potential returns per unit of risk. The Worldex Industry Trading is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,658,927 in Worldex Industry Trading on October 17, 2024 and sell it today you would earn a total of 73,073 from holding Worldex Industry Trading or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Worldex Industry Trading
Performance |
| Timeline |
| Samsung Electronics |
| Worldex Industry Trading |
Samsung Electronics and Worldex Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Worldex Industry
The main advantage of trading using opposite Samsung Electronics and Worldex Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Worldex Industry 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 Worldex Industry will offset losses from the drop in Worldex Industry's long position.| Samsung Electronics vs. Eagle Veterinary Technology | Samsung Electronics vs. CU Tech Corp | Samsung Electronics vs. Sungdo Engineering Construction | Samsung Electronics vs. Solution Advanced Technology |
| Worldex Industry vs. WONIK Materials CoLtd | Worldex Industry vs. SS TECH | Worldex Industry vs. TES Co | Worldex Industry vs. LEENO Industrial |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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