Correlation Between Seed Innovations and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Seed Innovations 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 Seed Innovations and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seed Innovations and Samsung Electronics Co, you can compare the effects of market volatilities on Seed Innovations 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 Seed Innovations with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seed Innovations and Samsung Electronics.
Diversification Opportunities for Seed Innovations and Samsung Electronics
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seed and Samsung is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Seed Innovations and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Seed Innovations 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 Seed Innovations 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 Seed Innovations i.e., Seed Innovations and Samsung Electronics go up and down completely randomly.
Pair Corralation between Seed Innovations and Samsung Electronics
Assuming the 90 days trading horizon Seed Innovations is expected to generate 1.11 times more return on investment than Samsung Electronics. However, Seed Innovations is 1.11 times more volatile than Samsung Electronics Co. It trades about 0.08 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.31 per unit of risk. If you would invest 155.00 in Seed Innovations on September 23, 2024 and sell it today you would earn a total of 5.00 from holding Seed Innovations or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seed Innovations vs. Samsung Electronics Co
Performance |
| Timeline |
| Seed Innovations |
| Samsung Electronics |
Seed Innovations and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seed Innovations and Samsung Electronics
The main advantage of trading using opposite Seed Innovations and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seed Innovations 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.| Seed Innovations vs. Samsung Electronics Co | Seed Innovations vs. Samsung Electronics Co | Seed Innovations vs. Hyundai Motor | Seed Innovations vs. Toyota Motor Corp |
| Samsung Electronics vs. Rockfire Resources plc | Samsung Electronics vs. Tlou Energy | Samsung Electronics vs. Ikigai Ventures | Samsung Electronics vs. Falcon Oil Gas |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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