Correlation Between Prudential Financial and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Prudential Financial 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 Prudential Financial and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Financial and Samsung Electronics Co, you can compare the effects of market volatilities on Prudential Financial 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 Prudential Financial with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Financial and Samsung Electronics.
Diversification Opportunities for Prudential Financial and Samsung Electronics
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prudential and Samsung is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Financial and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Prudential Financial 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 Prudential Financial 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 Prudential Financial i.e., Prudential Financial and Samsung Electronics go up and down completely randomly.
Pair Corralation between Prudential Financial and Samsung Electronics
Assuming the 90 days trading horizon Prudential Financial is expected to generate 0.87 times more return on investment than Samsung Electronics. However, Prudential Financial is 1.15 times less risky than Samsung Electronics. It trades about 0.05 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.1 per unit of risk. If you would invest 11,665 in Prudential Financial on August 31, 2024 and sell it today you would earn a total of 1,292 from holding Prudential Financial or generate 11.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Financial vs. Samsung Electronics Co
Performance |
| Timeline |
| Prudential Financial |
| Samsung Electronics |
Prudential Financial and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Financial and Samsung Electronics
The main advantage of trading using opposite Prudential Financial and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Financial 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.| Prudential Financial vs. Neometals | Prudential Financial vs. Coor Service Management | Prudential Financial vs. Aeorema Communications Plc | Prudential Financial vs. JLEN Environmental Assets |
| Samsung Electronics vs. Kaufman Et Broad | Samsung Electronics vs. Allianz Technology Trust | Samsung Electronics vs. Monster Beverage Corp | Samsung Electronics vs. Gaztransport et Technigaz |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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