Correlation Between Samsung Electronics and DataSolution
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and DataSolution 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 DataSolution 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 DataSolution, you can compare the effects of market volatilities on Samsung Electronics and DataSolution 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 DataSolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and DataSolution.
Diversification Opportunities for Samsung Electronics and DataSolution
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and DataSolution is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and DataSolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DataSolution 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 DataSolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DataSolution has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and DataSolution go up and down completely randomly.
Pair Corralation between Samsung Electronics and DataSolution
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the DataSolution. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.12 times less risky than DataSolution. The stock trades about -0.09 of its potential returns per unit of risk. The DataSolution is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 449,500 in DataSolution on September 4, 2024 and sell it today you would earn a total of 26,000 from holding DataSolution or generate 5.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. DataSolution
Performance |
| Timeline |
| Samsung Electronics |
| DataSolution |
Samsung Electronics and DataSolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and DataSolution
The main advantage of trading using opposite Samsung Electronics and DataSolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, DataSolution 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 DataSolution will offset losses from the drop in DataSolution's long position.| Samsung Electronics vs. DC Media Co | Samsung Electronics vs. Shinsegae Information Communication | Samsung Electronics vs. Insung Information Co | Samsung Electronics vs. FNC Entertainment Co |
| DataSolution vs. INFINITT Healthcare Co | DataSolution vs. PlayD Co | DataSolution vs. Lotte Non Life Insurance | DataSolution vs. BGF Retail Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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