Correlation Between V One and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both V One 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 V One and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between V One Tech Co and Samsung Electronics Co, you can compare the effects of market volatilities on V One 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 V One with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of V One and Samsung Electronics.
Diversification Opportunities for V One and Samsung Electronics
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 251630 and Samsung is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding V One Tech Co and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and V One 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 V One Tech Co 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 V One i.e., V One and Samsung Electronics go up and down completely randomly.
Pair Corralation between V One and Samsung Electronics
Assuming the 90 days trading horizon V One Tech Co is expected to generate 1.95 times more return on investment than Samsung Electronics. However, V One is 1.95 times more volatile than Samsung Electronics Co. It trades about -0.07 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.16 per unit of risk. If you would invest 410,594 in V One Tech Co on September 29, 2024 and sell it today you would lose (25,594) from holding V One Tech Co or give up 6.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
V One Tech Co vs. Samsung Electronics Co
Performance |
| Timeline |
| V One Tech |
| Samsung Electronics |
V One and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with V One and Samsung Electronics
The main advantage of trading using opposite V One and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if V One 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.| V One vs. Samsung Electronics Co | V One vs. Samsung Electronics Co | V One vs. LG Energy Solution | V One vs. SK Hynix |
| Samsung Electronics vs. LG Corp | Samsung Electronics vs. Zinus Inc | Samsung Electronics vs. Humasis Co | Samsung Electronics vs. JYP Entertainment |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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