Correlation Between Samsung Electronics and Assems
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Assems 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 Assems 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 Assems Inc, you can compare the effects of market volatilities on Samsung Electronics and Assems 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 Assems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Assems.
Diversification Opportunities for Samsung Electronics and Assems
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Assems is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Assems Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assems Inc 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 Assems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assems Inc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Assems go up and down completely randomly.
Pair Corralation between Samsung Electronics and Assems
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.68 times more return on investment than Assems. However, Samsung Electronics is 1.68 times more volatile than Assems Inc. It trades about -0.02 of its potential returns per unit of risk. Assems Inc is currently generating about -0.44 per unit of risk. If you would invest 4,865,000 in Samsung Electronics Co on August 31, 2024 and sell it today you would lose (90,000) from holding Samsung Electronics Co or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. Assems Inc
Performance |
| Timeline |
| Samsung Electronics |
| Assems Inc |
Samsung Electronics and Assems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Assems
The main advantage of trading using opposite Samsung Electronics and Assems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Assems 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 Assems will offset losses from the drop in Assems' long position.| Samsung Electronics vs. LG Corp | Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. Busan Ind | Samsung Electronics vs. Mirae Asset Daewoo |
| Assems vs. Dongbu Steel Co | Assems vs. BooKook Steel Co | Assems vs. SK Telecom Co | Assems vs. Dong A Steel Technology |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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