Correlation Between International Biotechnology and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both International Biotechnology 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 International Biotechnology and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Biotechnology Trust and Samsung Electronics Co, you can compare the effects of market volatilities on International Biotechnology 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 International Biotechnology with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Biotechnology and Samsung Electronics.
Diversification Opportunities for International Biotechnology and Samsung Electronics
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Samsung is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding International Biotechnology Tr and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and International Biotechnology 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 International Biotechnology Trust 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 International Biotechnology i.e., International Biotechnology and Samsung Electronics go up and down completely randomly.
Pair Corralation between International Biotechnology and Samsung Electronics
Assuming the 90 days trading horizon International Biotechnology Trust is expected to generate 0.63 times more return on investment than Samsung Electronics. However, International Biotechnology Trust is 1.6 times less risky than Samsung Electronics. It trades about 0.16 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.25 per unit of risk. If you would invest 69,000 in International Biotechnology Trust on November 6, 2024 and sell it today you would earn a total of 2,400 from holding International Biotechnology Trust or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Biotechnology Tr vs. Samsung Electronics Co
Performance |
| Timeline |
| International Biotechnology |
| Samsung Electronics |
International Biotechnology and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Biotechnology and Samsung Electronics
The main advantage of trading using opposite International Biotechnology and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Biotechnology 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.| International Biotechnology vs. Flow Traders NV | International Biotechnology vs. Vulcan Materials Co | International Biotechnology vs. Kaufman Et Broad | International Biotechnology vs. Auto Trader Group |
| Samsung Electronics vs. Optima Health plc | Samsung Electronics vs. Abingdon Health Plc | Samsung Electronics vs. CVS Health Corp | Samsung Electronics vs. Automatic Data Processing |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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