Correlation Between Samsung Electronics and Samhyun
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Samhyun 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 Samhyun 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 Samhyun, you can compare the effects of market volatilities on Samsung Electronics and Samhyun 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 Samhyun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Samhyun.
Diversification Opportunities for Samsung Electronics and Samhyun
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Samsung and Samhyun is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Samhyun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhyun 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 Samhyun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhyun has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Samhyun go up and down completely randomly.
Pair Corralation between Samsung Electronics and Samhyun
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Samhyun. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 3.82 times less risky than Samhyun. The stock trades about -0.22 of its potential returns per unit of risk. The Samhyun is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 696,000 in Samhyun on September 27, 2024 and sell it today you would earn a total of 64,000 from holding Samhyun or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Samhyun
Performance |
| Timeline |
| Samsung Electronics |
| Samhyun |
Samsung Electronics and Samhyun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Samhyun
The main advantage of trading using opposite Samsung Electronics and Samhyun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Samhyun 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 Samhyun will offset losses from the drop in Samhyun's long position.| Samsung Electronics vs. LG Corp | Samsung Electronics vs. Zinus Inc | Samsung Electronics vs. Humasis Co | Samsung Electronics vs. JYP Entertainment |
| Samhyun vs. Samsung Electronics Co | Samhyun vs. Samsung Electronics Co | Samhyun vs. LG Energy Solution | Samhyun 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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