Correlation Between Odfjell Drilling and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Odfjell Drilling 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 Odfjell Drilling and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odfjell Drilling and Samsung Electronics Co, you can compare the effects of market volatilities on Odfjell Drilling 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 Odfjell Drilling with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odfjell Drilling and Samsung Electronics.
Diversification Opportunities for Odfjell Drilling and Samsung Electronics
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Odfjell and Samsung is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Odfjell Drilling and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Odfjell Drilling 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 Odfjell Drilling 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 Odfjell Drilling i.e., Odfjell Drilling and Samsung Electronics go up and down completely randomly.
Pair Corralation between Odfjell Drilling and Samsung Electronics
Assuming the 90 days trading horizon Odfjell Drilling is expected to generate 0.85 times more return on investment than Samsung Electronics. However, Odfjell Drilling is 1.18 times less risky than Samsung Electronics. It trades about 0.28 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.07 per unit of risk. If you would invest 5,640 in Odfjell Drilling on November 8, 2024 and sell it today you would earn a total of 570.00 from holding Odfjell Drilling or generate 10.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Odfjell Drilling vs. Samsung Electronics Co
Performance |
| Timeline |
| Odfjell Drilling |
| Samsung Electronics |
Odfjell Drilling and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odfjell Drilling and Samsung Electronics
The main advantage of trading using opposite Odfjell Drilling and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odfjell Drilling 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.| Odfjell Drilling vs. Universal Health Services | Odfjell Drilling vs. Endeavour Mining Corp | Odfjell Drilling vs. GoldMining | Odfjell Drilling vs. Primary Health Properties |
| Samsung Electronics vs. European Metals Holdings | Samsung Electronics vs. Jacquet Metal Service | Samsung Electronics vs. Metals Exploration Plc | Samsung Electronics vs. Eastinco Mining Exploration |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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