Correlation Between DAX Index and Samsung Electronics
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By analyzing existing cross correlation between DAX Index and Samsung Electronics Co, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Samsung Electronics.
Diversification Opportunities for DAX Index and Samsung Electronics
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DAX and Samsung is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Samsung Electronics go up and down completely randomly.
Pair Corralation between DAX Index and Samsung Electronics
Assuming the 90 days trading horizon DAX Index is expected to under-perform the Samsung Electronics. But the index apears to be less risky and, when comparing its historical volatility, DAX Index is 2.74 times less risky than Samsung Electronics. The index trades about -0.03 of its potential returns per unit of risk. The Samsung Electronics Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 80,400 in Samsung Electronics Co on August 26, 2024 and sell it today you would earn a total of 2,200 from holding Samsung Electronics Co or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Samsung Electronics Co
Performance |
| Timeline |
DAX Index and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Samsung Electronics Co
Pair trading matchups for Samsung Electronics
Pair Trading with DAX Index and Samsung Electronics
The main advantage of trading using opposite DAX Index and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. Vishay Intertechnology | DAX Index vs. CHINA EDUCATION GROUP | DAX Index vs. Casio Computer CoLtd | DAX Index vs. Amkor Technology |
| Samsung Electronics vs. National Storage Affiliates | Samsung Electronics vs. Geratherm Medical AG | Samsung Electronics vs. PUBLIC STORAGE PRFO | Samsung Electronics vs. Japan Medical Dynamic |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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