Correlation Between Southern Copper and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Southern Copper 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 Southern Copper and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Copper and Samsung Electronics Co, you can compare the effects of market volatilities on Southern Copper 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 Southern Copper with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Copper and Samsung Electronics.
Diversification Opportunities for Southern Copper and Samsung Electronics
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Southern and Samsung is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Southern Copper and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Southern Copper 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 Southern Copper 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 Southern Copper i.e., Southern Copper and Samsung Electronics go up and down completely randomly.
Pair Corralation between Southern Copper and Samsung Electronics
Assuming the 90 days trading horizon Southern Copper is expected to generate 0.83 times more return on investment than Samsung Electronics. However, Southern Copper is 1.21 times less risky than Samsung Electronics. It trades about 0.05 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.2 per unit of risk. If you would invest 199,641 in Southern Copper on August 31, 2024 and sell it today you would earn a total of 10,549 from holding Southern Copper or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Copper vs. Samsung Electronics Co
Performance |
| Timeline |
| Southern Copper |
| Samsung Electronics |
Southern Copper and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Copper and Samsung Electronics
The main advantage of trading using opposite Southern Copper and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Copper 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.| Southern Copper vs. Deutsche Bank Aktiengesellschaft | Southern Copper vs. FIBRA Storage | Southern Copper vs. McEwen Mining | Southern Copper vs. Ross Stores |
| Samsung Electronics vs. Taiwan Semiconductor Manufacturing | Samsung Electronics vs. Martin Marietta Materials | Samsung Electronics vs. The Bank of | Samsung Electronics vs. First Republic Bank |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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