Correlation Between Deutsche Post and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Deutsche Post 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 Deutsche Post and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Post AG and Samsung Electronics Co, you can compare the effects of market volatilities on Deutsche Post 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 Deutsche Post with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Post and Samsung Electronics.
Diversification Opportunities for Deutsche Post and Samsung Electronics
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Deutsche and Samsung is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Post AG and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Deutsche Post 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 Deutsche Post AG 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 Deutsche Post i.e., Deutsche Post and Samsung Electronics go up and down completely randomly.
Pair Corralation between Deutsche Post and Samsung Electronics
Assuming the 90 days trading horizon Deutsche Post AG is expected to generate 0.83 times more return on investment than Samsung Electronics. However, Deutsche Post AG is 1.2 times less risky than Samsung Electronics. It trades about 0.01 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.01 per unit of risk. If you would invest 3,490 in Deutsche Post AG on August 30, 2024 and sell it today you would lose (43.00) from holding Deutsche Post AG or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Post AG vs. Samsung Electronics Co
Performance |
| Timeline |
| Deutsche Post AG |
| Samsung Electronics |
Deutsche Post and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Post and Samsung Electronics
The main advantage of trading using opposite Deutsche Post and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Post 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.| Deutsche Post vs. Lendinvest PLC | Deutsche Post vs. Neometals | Deutsche Post vs. Albion Technology General | Deutsche Post vs. Jupiter Fund Management |
| Samsung Electronics vs. Ondine Biomedical | Samsung Electronics vs. Europa Metals | Samsung Electronics vs. Lendinvest PLC | Samsung Electronics vs. Neometals |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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