Correlation Between Asia Technology and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Asia Technology 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 Asia Technology and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Technology Co and Samsung Electronics Co, you can compare the effects of market volatilities on Asia Technology 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 Asia Technology with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Technology and Samsung Electronics.
Diversification Opportunities for Asia Technology and Samsung Electronics
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asia and Samsung is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Asia Technology 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 Asia Technology 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 Asia Technology 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 Asia Technology i.e., Asia Technology and Samsung Electronics go up and down completely randomly.
Pair Corralation between Asia Technology and Samsung Electronics
Assuming the 90 days trading horizon Asia Technology Co is expected to generate 0.82 times more return on investment than Samsung Electronics. However, Asia Technology Co is 1.22 times less risky than Samsung Electronics. It trades about -0.02 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 243,480 in Asia Technology Co on August 25, 2024 and sell it today you would lose (26,480) from holding Asia Technology Co or give up 10.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Technology Co vs. Samsung Electronics Co
Performance |
| Timeline |
| Asia Technology |
| Samsung Electronics |
Asia Technology and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Technology and Samsung Electronics
The main advantage of trading using opposite Asia Technology and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Technology 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.| Asia Technology vs. Samsung Electronics Co | Asia Technology vs. Samsung Electronics Co | Asia Technology vs. Hyundai Motor Co | Asia Technology 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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