Correlation Between IShares Physical and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both IShares Physical 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 IShares Physical and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Physical Silver and Samsung Electronics Co, you can compare the effects of market volatilities on IShares Physical 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 IShares Physical with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Physical and Samsung Electronics.
Diversification Opportunities for IShares Physical and Samsung Electronics
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and Samsung is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding iShares Physical Silver and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and IShares Physical 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 iShares Physical Silver 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 IShares Physical i.e., IShares Physical and Samsung Electronics go up and down completely randomly.
Pair Corralation between IShares Physical and Samsung Electronics
Assuming the 90 days trading horizon IShares Physical is expected to generate 2.48 times less return on investment than Samsung Electronics. But when comparing it to its historical volatility, iShares Physical Silver is 1.41 times less risky than Samsung Electronics. It trades about 0.14 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 90,150 in Samsung Electronics Co on November 28, 2024 and sell it today you would earn a total of 8,850 from holding Samsung Electronics Co or generate 9.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Physical Silver vs. Samsung Electronics Co
Performance |
| Timeline |
| iShares Physical Silver |
| Samsung Electronics |
IShares Physical and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Physical and Samsung Electronics
The main advantage of trading using opposite IShares Physical and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Physical 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.| IShares Physical vs. Elmos Semiconductor SE | IShares Physical vs. JD Sports Fashion | IShares Physical vs. Ubisoft Entertainment | IShares Physical vs. Worldwide Healthcare Trust |
| Samsung Electronics vs. Metals Exploration Plc | Samsung Electronics vs. Central Asia Metals | Samsung Electronics vs. Young Cos Brewery | Samsung Electronics vs. Wheaton Precious Metals |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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