Correlation Between LAKE MATERIALS and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both LAKE MATERIALS 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 LAKE MATERIALS and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LAKE MATERIALS LTD and Samsung Electronics Co, you can compare the effects of market volatilities on LAKE MATERIALS 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 LAKE MATERIALS with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAKE MATERIALS and Samsung Electronics.
Diversification Opportunities for LAKE MATERIALS and Samsung Electronics
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LAKE and Samsung is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding LAKE MATERIALS LTD and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and LAKE MATERIALS 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 LAKE MATERIALS LTD 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 LAKE MATERIALS i.e., LAKE MATERIALS and Samsung Electronics go up and down completely randomly.
Pair Corralation between LAKE MATERIALS and Samsung Electronics
Assuming the 90 days trading horizon LAKE MATERIALS LTD is expected to under-perform the Samsung Electronics. In addition to that, LAKE MATERIALS is 1.26 times more volatile than Samsung Electronics Co. It trades about -0.15 of its total potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.02 per unit of volatility. If you would invest 4,880,000 in Samsung Electronics Co on August 29, 2024 and sell it today you would earn a total of 20,000 from holding Samsung Electronics Co or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LAKE MATERIALS LTD vs. Samsung Electronics Co
Performance |
| Timeline |
| LAKE MATERIALS LTD |
| Samsung Electronics |
LAKE MATERIALS and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAKE MATERIALS and Samsung Electronics
The main advantage of trading using opposite LAKE MATERIALS and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAKE MATERIALS 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.| LAKE MATERIALS vs. Samsung Electronics Co | LAKE MATERIALS vs. Samsung Electronics Co | LAKE MATERIALS vs. LG Energy Solution | LAKE MATERIALS vs. SK Hynix |
| 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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