Correlation Between Panasonic and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Panasonic 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 Panasonic and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panasonic and Samsung Electronics Co, you can compare the effects of market volatilities on Panasonic 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 Panasonic with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panasonic and Samsung Electronics.
Diversification Opportunities for Panasonic and Samsung Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Panasonic and Samsung is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Panasonic and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Panasonic 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 Panasonic 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 Panasonic i.e., Panasonic and Samsung Electronics go up and down completely randomly.
Pair Corralation between Panasonic and Samsung Electronics
Assuming the 90 days trading horizon Panasonic is expected to generate 1.41 times more return on investment than Samsung Electronics. However, Panasonic is 1.41 times more volatile than Samsung Electronics Co. It trades about 0.0 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.06 per unit of risk. If you would invest 9.00 in Panasonic on September 1, 2024 and sell it today you would lose (0.50) from holding Panasonic or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.38% |
| Values | Daily Returns |
Panasonic vs. Samsung Electronics Co
Performance |
| Timeline |
| Panasonic |
| Samsung Electronics |
Panasonic and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panasonic and Samsung Electronics
The main advantage of trading using opposite Panasonic and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panasonic 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.| Panasonic vs. Apple Inc | Panasonic vs. Apple Inc | Panasonic vs. Samsung Electronics Co | Panasonic vs. Samsung Electronics Co |
| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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