Correlation Between Applied Materials and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Applied 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 Applied 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 Applied Materials and Samsung Electronics Co, you can compare the effects of market volatilities on Applied 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 Applied Materials with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and Samsung Electronics.
Diversification Opportunities for Applied Materials and Samsung Electronics
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Applied and Samsung is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Applied 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 Applied Materials 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 Applied Materials i.e., Applied Materials and Samsung Electronics go up and down completely randomly.
Pair Corralation between Applied Materials and Samsung Electronics
If you would invest 332,000 in Applied Materials on October 20, 2024 and sell it today you would earn a total of 67,200 from holding Applied Materials or generate 20.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Applied Materials vs. Samsung Electronics Co
Performance |
| Timeline |
| Applied Materials |
| Samsung Electronics |
Applied Materials and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials and Samsung Electronics
The main advantage of trading using opposite Applied Materials and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied 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.| Applied Materials vs. UnitedHealth Group Incorporated | Applied Materials vs. Cognizant Technology Solutions | Applied Materials vs. KB Home | Applied Materials vs. Grupo Sports World |
| Samsung Electronics vs. Grupo Industrial Saltillo | Samsung Electronics vs. Delta Air Lines | Samsung Electronics vs. Ameriprise Financial | Samsung Electronics vs. Grupo Sports World |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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