Correlation Between Apax Global and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Apax Global 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 Apax Global and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apax Global Alpha and Samsung Electronics Co, you can compare the effects of market volatilities on Apax Global 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 Apax Global with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apax Global and Samsung Electronics.
Diversification Opportunities for Apax Global and Samsung Electronics
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Apax and Samsung is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Apax Global Alpha and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Apax Global 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 Apax Global Alpha 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 Apax Global i.e., Apax Global and Samsung Electronics go up and down completely randomly.
Pair Corralation between Apax Global and Samsung Electronics
Assuming the 90 days trading horizon Apax Global Alpha is expected to under-perform the Samsung Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Apax Global Alpha is 3.32 times less risky than Samsung Electronics. The stock trades about -0.03 of its potential returns per unit of risk. The Samsung Electronics Co is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 73,500 in Samsung Electronics Co on November 28, 2024 and sell it today you would earn a total of 8,100 from holding Samsung Electronics Co or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apax Global Alpha vs. Samsung Electronics Co
Performance |
| Timeline |
| Apax Global Alpha |
| Samsung Electronics |
Apax Global and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apax Global and Samsung Electronics
The main advantage of trading using opposite Apax Global and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apax Global 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.| Apax Global vs. Take Two Interactive Software | Apax Global vs. Sunny Optical Technology | Apax Global vs. Ashtead Technology Holdings | Apax Global vs. Polar Capital Technology |
| Samsung Electronics vs. Impax Environmental Markets | Samsung Electronics vs. Bell Food Group | Samsung Electronics vs. Austevoll Seafood ASA | Samsung Electronics vs. Westlake Chemical Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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