Correlation Between UNISEM and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both UNISEM 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 UNISEM and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNISEM Co and Samsung Electronics Co, you can compare the effects of market volatilities on UNISEM 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 UNISEM with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNISEM and Samsung Electronics.
Diversification Opportunities for UNISEM and Samsung Electronics
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UNISEM and Samsung is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding UNISEM 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 UNISEM 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 UNISEM 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 UNISEM i.e., UNISEM and Samsung Electronics go up and down completely randomly.
Pair Corralation between UNISEM and Samsung Electronics
Assuming the 90 days trading horizon UNISEM Co is expected to under-perform the Samsung Electronics. In addition to that, UNISEM is 1.3 times more volatile than Samsung Electronics Co. It trades about -0.19 of its total potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.09 per unit of volatility. If you would invest 5,090,000 in Samsung Electronics Co on September 3, 2024 and sell it today you would lose (470,000) from holding Samsung Electronics Co or give up 9.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNISEM Co vs. Samsung Electronics Co
Performance |
| Timeline |
| UNISEM |
| Samsung Electronics |
UNISEM and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNISEM and Samsung Electronics
The main advantage of trading using opposite UNISEM and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNISEM 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.The idea behind UNISEM Co and Samsung Electronics Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. UNISEM Co | Samsung Electronics vs. RPBio Inc | Samsung Electronics vs. Finebesteel |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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