Correlation Between Addtech and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Addtech 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 Addtech and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech and Samsung Electronics Co, you can compare the effects of market volatilities on Addtech 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 Addtech with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech and Samsung Electronics.
Diversification Opportunities for Addtech and Samsung Electronics
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Addtech and Samsung is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Addtech and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Addtech 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 Addtech 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 Addtech i.e., Addtech and Samsung Electronics go up and down completely randomly.
Pair Corralation between Addtech and Samsung Electronics
Assuming the 90 days trading horizon Addtech is expected to generate 0.65 times more return on investment than Samsung Electronics. However, Addtech is 1.53 times less risky than Samsung Electronics. It trades about 0.04 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.11 per unit of risk. If you would invest 29,450 in Addtech on September 23, 2024 and sell it today you would earn a total of 760.00 from holding Addtech or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addtech vs. Samsung Electronics Co
Performance |
| Timeline |
| Addtech |
| Samsung Electronics |
Addtech and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech and Samsung Electronics
The main advantage of trading using opposite Addtech and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech 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.| Addtech vs. Uniper SE | Addtech vs. Mulberry Group PLC | Addtech vs. London Security Plc | Addtech vs. Triad Group PLC |
| Samsung Electronics vs. Addtech | Samsung Electronics vs. Roper Technologies | Samsung Electronics vs. alstria office REIT AG | Samsung Electronics vs. Arrow Electronics |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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