Correlation Between Samsung Electronics and SillaJen
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and SillaJen 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 SillaJen 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 SillaJen, you can compare the effects of market volatilities on Samsung Electronics and SillaJen 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 SillaJen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and SillaJen.
Diversification Opportunities for Samsung Electronics and SillaJen
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and SillaJen is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and SillaJen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SillaJen 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 SillaJen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SillaJen has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and SillaJen go up and down completely randomly.
Pair Corralation between Samsung Electronics and SillaJen
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.66 times more return on investment than SillaJen. However, Samsung Electronics Co is 1.51 times less risky than SillaJen. It trades about -0.03 of its potential returns per unit of risk. SillaJen is currently generating about -0.06 per unit of risk. If you would invest 5,595,291 in Samsung Electronics Co on September 2, 2024 and sell it today you would lose (975,291) from holding Samsung Electronics Co or give up 17.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. SillaJen
Performance |
| Timeline |
| Samsung Electronics |
| SillaJen |
Samsung Electronics and SillaJen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and SillaJen
The main advantage of trading using opposite Samsung Electronics and SillaJen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, SillaJen 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 SillaJen will offset losses from the drop in SillaJen's long position.| Samsung Electronics vs. LG Corp | Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. Busan Ind | Samsung Electronics vs. Mirae Asset Daewoo |
| SillaJen vs. Samsung Electronics Co | SillaJen vs. Samsung Electronics Co | SillaJen vs. LG Energy Solution | SillaJen vs. SK Hynix |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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