Correlation Between System and Samsung Fire
Can any of the company-specific risk be diversified away by investing in both System and Samsung Fire 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 System and Samsung Fire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between System and Application and Samsung Fire Marine, you can compare the effects of market volatilities on System and Samsung Fire 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 System with a short position of Samsung Fire. Check out your portfolio center. Please also check ongoing floating volatility patterns of System and Samsung Fire.
Diversification Opportunities for System and Samsung Fire
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between System and Samsung is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding System and Application and Samsung Fire Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Fire Marine and System 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 System and Application are associated (or correlated) with Samsung Fire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Fire Marine has no effect on the direction of System i.e., System and Samsung Fire go up and down completely randomly.
Pair Corralation between System and Samsung Fire
Assuming the 90 days trading horizon System and Application is expected to generate 1.77 times more return on investment than Samsung Fire. However, System is 1.77 times more volatile than Samsung Fire Marine. It trades about 0.12 of its potential returns per unit of risk. Samsung Fire Marine is currently generating about -0.02 per unit of risk. If you would invest 137,248 in System and Application on October 17, 2024 and sell it today you would earn a total of 26,552 from holding System and Application or generate 19.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
System and Application vs. Samsung Fire Marine
Performance |
| Timeline |
| System and Application |
| Samsung Fire Marine |
System and Samsung Fire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with System and Samsung Fire
The main advantage of trading using opposite System and Samsung Fire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if System position performs unexpectedly, Samsung Fire 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 Fire will offset losses from the drop in Samsung Fire's long position.| System vs. Echomarketing CoLtd | System vs. SEOWONINTECHCoLtd | System vs. Raontech | System vs. Yura Tech Co |
| Samsung Fire vs. Moadata Co | Samsung Fire vs. Samyang Foods Co | Samsung Fire vs. Organic Special Pet | Samsung Fire vs. System and Application |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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