Correlation Between LS Electric and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both LS Electric 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 LS Electric and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LS Electric and Samsung Electronics Co, you can compare the effects of market volatilities on LS Electric 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 LS Electric with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of LS Electric and Samsung Electronics.
Diversification Opportunities for LS Electric and Samsung Electronics
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 010120 and Samsung is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding LS Electric and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and LS Electric 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 LS Electric 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 LS Electric i.e., LS Electric and Samsung Electronics go up and down completely randomly.
Pair Corralation between LS Electric and Samsung Electronics
Assuming the 90 days trading horizon LS Electric is expected to generate 2.38 times more return on investment than Samsung Electronics. However, LS Electric is 2.38 times more volatile than Samsung Electronics Co. It trades about 0.07 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.03 per unit of risk. If you would invest 7,570,000 in LS Electric on August 26, 2024 and sell it today you would earn a total of 5,600,000 from holding LS Electric or generate 73.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LS Electric vs. Samsung Electronics Co
Performance |
| Timeline |
| LS Electric |
| Samsung Electronics |
LS Electric and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LS Electric and Samsung Electronics
The main advantage of trading using opposite LS Electric and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LS Electric 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.| LS Electric vs. Samsung Electronics Co | LS Electric vs. Samsung Electronics Co | LS Electric vs. Hyundai Motor Co | LS Electric vs. Hyundai Motor |
| Samsung Electronics vs. Mobileleader CoLtd | Samsung Electronics vs. Innowireless Co | Samsung Electronics vs. Daechang Steel Co | Samsung Electronics vs. Hanil Iron Steel |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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