Correlation Between TS Investment and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both TS Investment 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 TS Investment and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TS Investment Corp and Samsung Electronics Co, you can compare the effects of market volatilities on TS Investment 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 TS Investment with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of TS Investment and Samsung Electronics.
Diversification Opportunities for TS Investment and Samsung Electronics
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 246690 and Samsung is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding TS Investment Corp and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and TS Investment 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 TS Investment Corp 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 TS Investment i.e., TS Investment and Samsung Electronics go up and down completely randomly.
Pair Corralation between TS Investment and Samsung Electronics
Assuming the 90 days trading horizon TS Investment Corp is expected to under-perform the Samsung Electronics. But the stock apears to be less risky and, when comparing its historical volatility, TS Investment Corp is 1.58 times less risky than Samsung Electronics. The stock trades about -0.27 of its potential returns per unit of risk. The Samsung Electronics Co is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 5,310,000 in Samsung Electronics Co on August 28, 2024 and sell it today you would lose (410,000) from holding Samsung Electronics Co or give up 7.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TS Investment Corp vs. Samsung Electronics Co
Performance |
| Timeline |
| TS Investment Corp |
| Samsung Electronics |
TS Investment and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TS Investment and Samsung Electronics
The main advantage of trading using opposite TS Investment and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TS Investment 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.| TS Investment vs. Sejong Telecom | TS Investment vs. Sunny Electronics Corp | TS Investment vs. Jeju Beer Co | TS Investment vs. Cuckoo Electronics Co |
| Samsung Electronics vs. JYP Entertainment | Samsung Electronics vs. Samsung Heavy Industries | Samsung Electronics vs. Hanjinkal |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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