Correlation Between GS Retail and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both GS Retail and Samsung Electronics 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 GS Retail and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Retail Co and Samsung Electronics Co, you can compare the effects of market volatilities on GS Retail and Samsung Electronics 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 GS Retail with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Retail and Samsung Electronics.
Diversification Opportunities for GS Retail and Samsung Electronics
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 007070 and Samsung is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding GS Retail Co and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and GS Retail 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 GS Retail Co are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of GS Retail i.e., GS Retail and Samsung Electronics go up and down completely randomly.
Pair Corralation between GS Retail and Samsung Electronics
Assuming the 90 days trading horizon GS Retail Co is expected to under-perform the Samsung Electronics. In addition to that, GS Retail is 1.04 times more volatile than Samsung Electronics Co. It trades about -0.02 of its total potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.01 per unit of volatility. If you would invest 5,784,855 in Samsung Electronics Co on August 24, 2024 and sell it today you would lose (144,855) from holding Samsung Electronics Co or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Retail Co vs. Samsung Electronics Co
Performance |
| Timeline |
| GS Retail |
| Samsung Electronics |
GS Retail and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Retail and Samsung Electronics
The main advantage of trading using opposite GS Retail and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Retail position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| GS Retail vs. AptaBio Therapeutics | GS Retail vs. Daewoo SBI SPAC | GS Retail vs. Dream Security co | GS Retail vs. Microfriend |
| Samsung Electronics vs. Haesung Industrial Co | Samsung Electronics vs. Taeyang Metal Industrial | Samsung Electronics vs. Hanjin Transportation Co | Samsung Electronics vs. GS 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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