Correlation Between Boeing and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Boeing 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 Boeing and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Samsung Electronics Co, you can compare the effects of market volatilities on Boeing 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 Boeing with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Samsung Electronics.
Diversification Opportunities for Boeing and Samsung Electronics
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boeing and Samsung is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Boeing 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 The Boeing 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 Boeing i.e., Boeing and Samsung Electronics go up and down completely randomly.
Pair Corralation between Boeing and Samsung Electronics
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the Samsung Electronics. In addition to that, Boeing is 20.47 times more volatile than Samsung Electronics Co. It trades about -0.01 of its total potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.15 per unit of volatility. If you would invest 4,033 in Samsung Electronics Co on August 26, 2024 and sell it today you would earn a total of 27.00 from holding Samsung Electronics Co or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boeing vs. Samsung Electronics Co
Performance |
| Timeline |
| Boeing |
| Samsung Electronics |
Boeing and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Samsung Electronics
The main advantage of trading using opposite Boeing and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing 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.The idea behind The Boeing and Samsung Electronics Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Samsung Electronics vs. Copa Holdings SA | Samsung Electronics vs. United Airlines Holdings | Samsung Electronics vs. Delta Air Lines | Samsung Electronics vs. SkyWest |
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 Stocks Directory module to find actively traded stocks across global markets.
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