Correlation Between Ping An and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Ping An 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 Ping An and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ping An Insurance and Samsung Electronics Co, you can compare the effects of market volatilities on Ping An 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 Ping An with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Samsung Electronics.
Diversification Opportunities for Ping An and Samsung Electronics
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ping and Samsung is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Ping An 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 Ping An Insurance 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 Ping An i.e., Ping An and Samsung Electronics go up and down completely randomly.
Pair Corralation between Ping An and Samsung Electronics
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 2.18 times more return on investment than Samsung Electronics. However, Ping An is 2.18 times more volatile than Samsung Electronics Co. It trades about 0.18 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.17 per unit of risk. If you would invest 328.00 in Ping An Insurance on September 3, 2024 and sell it today you would earn a total of 212.00 from holding Ping An Insurance or generate 64.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Samsung Electronics Co
Performance |
| Timeline |
| Ping An Insurance |
| Samsung Electronics |
Ping An and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Samsung Electronics
The main advantage of trading using opposite Ping An and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An 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.| Ping An vs. LION ONE METALS | Ping An vs. IDP EDUCATION LTD | Ping An vs. DEVRY EDUCATION GRP | Ping An vs. Perseus Mining Limited |
| Samsung Electronics vs. ELMOS SEMICONDUCTOR | Samsung Electronics vs. Ping An Insurance | Samsung Electronics vs. NXP Semiconductors NV | Samsung Electronics vs. American Eagle Outfitters |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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