Correlation Between SMA Solar and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both SMA Solar 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 SMA Solar and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMA Solar Technology and Samsung Electronics Co, you can compare the effects of market volatilities on SMA Solar 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 SMA Solar with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Samsung Electronics.
Diversification Opportunities for SMA Solar and Samsung Electronics
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SMA and Samsung is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and SMA Solar 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 SMA Solar Technology 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 SMA Solar i.e., SMA Solar and Samsung Electronics go up and down completely randomly.
Pair Corralation between SMA Solar and Samsung Electronics
Assuming the 90 days trading horizon SMA Solar Technology is expected to under-perform the Samsung Electronics. In addition to that, SMA Solar is 1.45 times more volatile than Samsung Electronics Co. It trades about -0.14 of its total potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.09 per unit of volatility. If you would invest 105,900 in Samsung Electronics Co on September 1, 2024 and sell it today you would lose (7,800) from holding Samsung Electronics Co or give up 7.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. Samsung Electronics Co
Performance |
| Timeline |
| SMA Solar Technology |
| Samsung Electronics |
SMA Solar and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Samsung Electronics
The main advantage of trading using opposite SMA Solar and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar 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.| SMA Solar vs. Uniper SE | SMA Solar vs. Mulberry Group PLC | SMA Solar vs. London Security Plc | SMA Solar vs. Triad Group PLC |
| Samsung Electronics vs. Ecclesiastical Insurance Office | Samsung Electronics vs. FC Investment Trust | Samsung Electronics vs. New Residential Investment | Samsung Electronics vs. DFS Furniture PLC |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |