Correlation Between Samsung Electronics and CU Tech
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and CU Tech 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 CU Tech 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 CU Tech Corp, you can compare the effects of market volatilities on Samsung Electronics and CU Tech 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 CU Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and CU Tech.
Diversification Opportunities for Samsung Electronics and CU Tech
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and 376290 is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and CU Tech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CU Tech Corp 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 CU Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CU Tech Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and CU Tech go up and down completely randomly.
Pair Corralation between Samsung Electronics and CU Tech
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.8 times more return on investment than CU Tech. However, Samsung Electronics Co is 1.26 times less risky than CU Tech. It trades about -0.01 of its potential returns per unit of risk. CU Tech Corp is currently generating about -0.03 per unit of risk. If you would invest 5,164,599 in Samsung Electronics Co on September 2, 2024 and sell it today you would lose (544,599) from holding Samsung Electronics Co or give up 10.54% 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. CU Tech Corp
Performance |
| Timeline |
| Samsung Electronics |
| CU Tech Corp |
Samsung Electronics and CU Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and CU Tech
The main advantage of trading using opposite Samsung Electronics and CU Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, CU Tech 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 CU Tech will offset losses from the drop in CU Tech'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 |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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