Correlation Between AIR PRODCHEMICALS and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS 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 AIR PRODCHEMICALS and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and Samsung Electronics Co, you can compare the effects of market volatilities on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and Samsung Electronics.
Diversification Opportunities for AIR PRODCHEMICALS and Samsung Electronics
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AIR and Samsung is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and Samsung Electronics go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and Samsung Electronics
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.72 times more return on investment than Samsung Electronics. However, AIR PRODCHEMICALS is 1.39 times less risky than Samsung Electronics. It trades about 0.25 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.15 per unit of risk. If you would invest 25,004 in AIR PRODCHEMICALS on September 3, 2024 and sell it today you would earn a total of 6,626 from holding AIR PRODCHEMICALS or generate 26.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. Samsung Electronics Co
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| Samsung Electronics |
AIR PRODCHEMICALS and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and Samsung Electronics
The main advantage of trading using opposite AIR PRODCHEMICALS and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS 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.| AIR PRODCHEMICALS vs. Tsingtao Brewery | AIR PRODCHEMICALS vs. Broadwind | AIR PRODCHEMICALS vs. National Beverage Corp | AIR PRODCHEMICALS vs. United Breweries Co |
| Samsung Electronics vs. Quaker Chemical | Samsung Electronics vs. TIANDE CHEMICAL | Samsung Electronics vs. CARSALESCOM | Samsung Electronics vs. AIR PRODCHEMICALS |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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