Correlation Between Ocean Harvest and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Ocean Harvest 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 Ocean Harvest and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocean Harvest Technology and Samsung Electronics Co, you can compare the effects of market volatilities on Ocean Harvest 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 Ocean Harvest with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Harvest and Samsung Electronics.
Diversification Opportunities for Ocean Harvest and Samsung Electronics
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ocean and Samsung is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Harvest Technology and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Ocean Harvest 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 Ocean Harvest Technology 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 Ocean Harvest i.e., Ocean Harvest and Samsung Electronics go up and down completely randomly.
Pair Corralation between Ocean Harvest and Samsung Electronics
Assuming the 90 days trading horizon Ocean Harvest Technology is expected to generate 1.69 times more return on investment than Samsung Electronics. However, Ocean Harvest is 1.69 times more volatile than Samsung Electronics Co. It trades about -0.02 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 950.00 in Ocean Harvest Technology on November 5, 2024 and sell it today you would lose (250.00) from holding Ocean Harvest Technology or give up 26.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocean Harvest Technology vs. Samsung Electronics Co
Performance |
| Timeline |
| Ocean Harvest Technology |
| Samsung Electronics |
Ocean Harvest and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocean Harvest and Samsung Electronics
The main advantage of trading using opposite Ocean Harvest and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Harvest 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.| Ocean Harvest vs. Endeavour Mining Corp | Ocean Harvest vs. Silver Bullet Data | Ocean Harvest vs. Vienna Insurance Group | Ocean Harvest vs. Leroy Seafood Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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