Correlation Between Samsung Electronics and Amogreentech
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Amogreentech 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 Amogreentech 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 Amogreentech Co, you can compare the effects of market volatilities on Samsung Electronics and Amogreentech 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 Amogreentech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Amogreentech.
Diversification Opportunities for Samsung Electronics and Amogreentech
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Amogreentech is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Amogreentech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amogreentech 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 Amogreentech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amogreentech has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Amogreentech go up and down completely randomly.
Pair Corralation between Samsung Electronics and Amogreentech
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.74 times more return on investment than Amogreentech. However, Samsung Electronics Co is 1.36 times less risky than Amogreentech. It trades about 0.02 of its potential returns per unit of risk. Amogreentech Co is currently generating about -0.06 per unit of risk. If you would invest 4,880,000 in Samsung Electronics Co on August 29, 2024 and sell it today you would earn a total of 20,000 from holding Samsung Electronics Co or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Amogreentech Co
Performance |
| Timeline |
| Samsung Electronics |
| Amogreentech |
Samsung Electronics and Amogreentech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Amogreentech
The main advantage of trading using opposite Samsung Electronics and Amogreentech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Amogreentech 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 Amogreentech will offset losses from the drop in Amogreentech's long position.| Samsung Electronics vs. JYP Entertainment | Samsung Electronics vs. Samsung Heavy Industries | Samsung Electronics vs. Hanjinkal |
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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