Correlation Between Samsung Electronics and Vaxcell Bio
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Vaxcell Bio 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 Vaxcell Bio 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 Vaxcell Bio Therapeutics Co, you can compare the effects of market volatilities on Samsung Electronics and Vaxcell Bio 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 Vaxcell Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Vaxcell Bio.
Diversification Opportunities for Samsung Electronics and Vaxcell Bio
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Vaxcell is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Vaxcell Bio Therapeutics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaxcell Bio Therapeu 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 Vaxcell Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaxcell Bio Therapeu has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Vaxcell Bio go up and down completely randomly.
Pair Corralation between Samsung Electronics and Vaxcell Bio
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.85 times more return on investment than Vaxcell Bio. However, Samsung Electronics Co is 1.18 times less risky than Vaxcell Bio. It trades about -0.18 of its potential returns per unit of risk. Vaxcell Bio Therapeutics Co is currently generating about -0.15 per unit of risk. If you would invest 4,510,000 in Samsung Electronics Co on November 4, 2024 and sell it today you would lose (210,000) from holding Samsung Electronics Co or give up 4.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Vaxcell Bio Therapeutics Co
Performance |
| Timeline |
| Samsung Electronics |
| Vaxcell Bio Therapeu |
Samsung Electronics and Vaxcell Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Vaxcell Bio
The main advantage of trading using opposite Samsung Electronics and Vaxcell Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Vaxcell Bio 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 Vaxcell Bio will offset losses from the drop in Vaxcell Bio's long position.| Samsung Electronics vs. Hyundai Green Food | Samsung Electronics vs. Hotel Shilla Co | Samsung Electronics vs. Sam Yang Foods | Samsung Electronics vs. Haitai Confectionery Foods |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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