Correlation Between Samsung Electronics and Shinhan WTI
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Shinhan WTI 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 Shinhan WTI 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 Shinhan WTI Futures, you can compare the effects of market volatilities on Samsung Electronics and Shinhan WTI 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 Shinhan WTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Shinhan WTI.
Diversification Opportunities for Samsung Electronics and Shinhan WTI
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Shinhan is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Shinhan WTI Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan WTI Futures 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 Shinhan WTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan WTI Futures has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Shinhan WTI go up and down completely randomly.
Pair Corralation between Samsung Electronics and Shinhan WTI
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Shinhan WTI. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.19 times less risky than Shinhan WTI. The stock trades about -0.18 of its potential returns per unit of risk. The Shinhan WTI Futures is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 770,000 in Shinhan WTI Futures on November 4, 2024 and sell it today you would earn a total of 13,500 from holding Shinhan WTI Futures or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Shinhan WTI Futures
Performance |
| Timeline |
| Samsung Electronics |
| Shinhan WTI Futures |
Samsung Electronics and Shinhan WTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Shinhan WTI
The main advantage of trading using opposite Samsung Electronics and Shinhan WTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Shinhan WTI 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 Shinhan WTI will offset losses from the drop in Shinhan WTI's long position.| Samsung Electronics vs. YG Entertainment | Samsung Electronics vs. Digital Multimedia Technology | Samsung Electronics vs. ECSTELECOM Co | Samsung Electronics vs. Kaonmedia Co |
| Shinhan WTI vs. DB Financial Investment | Shinhan WTI vs. Hyundai Industrial Co | Shinhan WTI vs. PJ Metal Co | Shinhan WTI vs. Formetal 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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