Correlation Between AEON STORES and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both AEON STORES 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 AEON STORES and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEON STORES and Samsung Electronics Co, you can compare the effects of market volatilities on AEON STORES 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 AEON STORES with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON STORES and Samsung Electronics.
Diversification Opportunities for AEON STORES and Samsung Electronics
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AEON and Samsung is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding AEON STORES and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and AEON STORES 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 AEON STORES 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 AEON STORES i.e., AEON STORES and Samsung Electronics go up and down completely randomly.
Pair Corralation between AEON STORES and Samsung Electronics
Assuming the 90 days trading horizon AEON STORES is expected to generate 1.81 times more return on investment than Samsung Electronics. However, AEON STORES is 1.81 times more volatile than Samsung Electronics Co. It trades about 0.0 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.01 per unit of risk. If you would invest 8.37 in AEON STORES on August 30, 2024 and sell it today you would lose (2.32) from holding AEON STORES or give up 27.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEON STORES vs. Samsung Electronics Co
Performance |
| Timeline |
| AEON STORES |
| Samsung Electronics |
AEON STORES and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEON STORES and Samsung Electronics
The main advantage of trading using opposite AEON STORES and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEON STORES 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.| AEON STORES vs. Apple Inc | AEON STORES vs. Apple Inc | AEON STORES vs. Superior Plus Corp | AEON STORES vs. SIVERS SEMICONDUCTORS AB |
| Samsung Electronics vs. Gladstone Investment | Samsung Electronics vs. Apollo Investment Corp | Samsung Electronics vs. EAT WELL INVESTMENT | Samsung Electronics vs. EEDUCATION ALBERT AB |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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