Correlation Between Mobile Appliance and Samsung Fire
Can any of the company-specific risk be diversified away by investing in both Mobile Appliance 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 Mobile Appliance and Samsung Fire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobile Appliance and Samsung Fire Marine, you can compare the effects of market volatilities on Mobile Appliance 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 Mobile Appliance with a short position of Samsung Fire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobile Appliance and Samsung Fire.
Diversification Opportunities for Mobile Appliance and Samsung Fire
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mobile and Samsung is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mobile Appliance 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 Mobile Appliance 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 Mobile Appliance 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 Mobile Appliance i.e., Mobile Appliance and Samsung Fire go up and down completely randomly.
Pair Corralation between Mobile Appliance and Samsung Fire
Assuming the 90 days trading horizon Mobile Appliance is expected to generate 0.7 times more return on investment than Samsung Fire. However, Mobile Appliance is 1.42 times less risky than Samsung Fire. It trades about 0.1 of its potential returns per unit of risk. Samsung Fire Marine is currently generating about 0.04 per unit of risk. If you would invest 214,500 in Mobile Appliance on November 7, 2024 and sell it today you would earn a total of 8,500 from holding Mobile Appliance or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Mobile Appliance vs. Samsung Fire Marine
Performance |
| Timeline |
| Mobile Appliance |
| Samsung Fire Marine |
Mobile Appliance and Samsung Fire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobile Appliance and Samsung Fire
The main advantage of trading using opposite Mobile Appliance and Samsung Fire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile Appliance 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.| Mobile Appliance vs. SK Chemicals Co | Mobile Appliance vs. Ilji Technology Co | Mobile Appliance vs. Korea Plasma Technology | Mobile Appliance vs. NewFlex Technology Co |
| Samsung Fire vs. Shinhan Financial Group | Samsung Fire vs. Hana Financial | Samsung Fire vs. Samsung Electronics Co | Samsung Fire vs. Samsung Electronics 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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