Correlation Between Canadian General and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Canadian General 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 Canadian General and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian General Investments and Samsung Electronics Co, you can compare the effects of market volatilities on Canadian General 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 Canadian General with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Samsung Electronics.
Diversification Opportunities for Canadian General and Samsung Electronics
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Canadian and Samsung is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Canadian General 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 Canadian General Investments 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 Canadian General i.e., Canadian General and Samsung Electronics go up and down completely randomly.
Pair Corralation between Canadian General and Samsung Electronics
Assuming the 90 days trading horizon Canadian General Investments is expected to generate 1.32 times more return on investment than Samsung Electronics. However, Canadian General is 1.32 times more volatile than Samsung Electronics Co. It trades about -0.05 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.07 per unit of risk. If you would invest 226,000 in Canadian General Investments on November 8, 2024 and sell it today you would lose (7,000) from holding Canadian General Investments or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian General Investments vs. Samsung Electronics Co
Performance |
| Timeline |
| Canadian General Inv |
| Samsung Electronics |
Canadian General and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Samsung Electronics
The main advantage of trading using opposite Canadian General and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General 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.| Canadian General vs. Invesco Physical Silver | Canadian General vs. Griffin Mining | Canadian General vs. Silvercorp Metals | Canadian General vs. Flow Traders NV |
| Samsung Electronics vs. European Metals Holdings | Samsung Electronics vs. Jacquet Metal Service | Samsung Electronics vs. Metals Exploration Plc | Samsung Electronics vs. Eastinco Mining Exploration |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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