Correlation Between Geely Automobile and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Geely Automobile 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 Geely Automobile and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geely Automobile Holdings and Samsung Electronics Co, you can compare the effects of market volatilities on Geely Automobile 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 Geely Automobile with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Samsung Electronics.
Diversification Opportunities for Geely Automobile and Samsung Electronics
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Geely and Samsung is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Geely Automobile 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 Geely Automobile Holdings 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 Geely Automobile i.e., Geely Automobile and Samsung Electronics go up and down completely randomly.
Pair Corralation between Geely Automobile and Samsung Electronics
Assuming the 90 days trading horizon Geely Automobile Holdings is expected to generate 1.6 times more return on investment than Samsung Electronics. However, Geely Automobile is 1.6 times more volatile than Samsung Electronics Co. It trades about 0.02 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 1,500 in Geely Automobile Holdings on October 31, 2024 and sell it today you would earn a total of 0.00 from holding Geely Automobile Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Samsung Electronics Co
Performance |
| Timeline |
| Geely Automobile Holdings |
| Samsung Electronics |
Geely Automobile and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Samsung Electronics
The main advantage of trading using opposite Geely Automobile and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile 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.| Geely Automobile vs. Berkshire Hathaway | Geely Automobile vs. Samsung Electronics Co | Geely Automobile vs. Samsung Electronics Co | Geely Automobile vs. Chocoladefabriken Lindt Spruengli |
| Samsung Electronics vs. Canadian General Investments | Samsung Electronics vs. Edinburgh Investment Trust | Samsung Electronics vs. Cairn Homes PLC | Samsung Electronics vs. Odfjell Drilling |
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.
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