Correlation Between Chiba Bank and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Chiba Bank 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 Chiba Bank and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chiba Bank and Samsung Electronics Co, you can compare the effects of market volatilities on Chiba Bank 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 Chiba Bank with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiba Bank and Samsung Electronics.
Diversification Opportunities for Chiba Bank and Samsung Electronics
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chiba and Samsung is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Chiba Bank and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Chiba Bank 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 Chiba Bank 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 Chiba Bank i.e., Chiba Bank and Samsung Electronics go up and down completely randomly.
Pair Corralation between Chiba Bank and Samsung Electronics
Assuming the 90 days horizon Chiba Bank is expected to generate 0.76 times more return on investment than Samsung Electronics. However, Chiba Bank is 1.32 times less risky than Samsung Electronics. It trades about 0.24 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.0 per unit of risk. If you would invest 705.00 in Chiba Bank on September 3, 2024 and sell it today you would earn a total of 75.00 from holding Chiba Bank or generate 10.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiba Bank vs. Samsung Electronics Co
Performance |
| Timeline |
| Chiba Bank |
| Samsung Electronics |
Chiba Bank and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiba Bank and Samsung Electronics
The main advantage of trading using opposite Chiba Bank and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiba Bank 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.| Chiba Bank vs. TOTAL GABON | Chiba Bank vs. Walgreens Boots Alliance | Chiba Bank vs. Peak Resources Limited |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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