Correlation Between Samsung Electronics and Seojin System
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Seojin System 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 Seojin System 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 Seojin System CoLtd, you can compare the effects of market volatilities on Samsung Electronics and Seojin System 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 Seojin System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Seojin System.
Diversification Opportunities for Samsung Electronics and Seojin System
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Seojin is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Seojin System CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seojin System CoLtd 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 Seojin System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seojin System CoLtd has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Seojin System go up and down completely randomly.
Pair Corralation between Samsung Electronics and Seojin System
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.78 times more return on investment than Seojin System. However, Samsung Electronics Co is 1.28 times less risky than Seojin System. It trades about -0.05 of its potential returns per unit of risk. Seojin System CoLtd is currently generating about -0.13 per unit of risk. If you would invest 4,795,000 in Samsung Electronics Co on September 1, 2024 and sell it today you would lose (175,000) from holding Samsung Electronics Co or give up 3.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Seojin System CoLtd
Performance |
| Timeline |
| Samsung Electronics |
| Seojin System CoLtd |
Samsung Electronics and Seojin System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Seojin System
The main advantage of trading using opposite Samsung Electronics and Seojin System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Seojin System 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 Seojin System will offset losses from the drop in Seojin System's long position.| Samsung Electronics vs. Seoul Electronics Telecom | Samsung Electronics vs. Ni Steel | Samsung Electronics vs. CKH Food Health | Samsung Electronics vs. Daedong Steel Co |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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