Correlation Between Samsung Electronics and Sparebanken Vest
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sparebanken Vest 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 Samsung Electronics and Sparebanken Vest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Sparebanken Vest, you can compare the effects of market volatilities on Samsung Electronics and Sparebanken Vest 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 Samsung Electronics with a short position of Sparebanken Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sparebanken Vest.
Diversification Opportunities for Samsung Electronics and Sparebanken Vest
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Sparebanken is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sparebanken Vest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebanken Vest and Samsung Electronics 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 Samsung Electronics Co are associated (or correlated) with Sparebanken Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebanken Vest has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sparebanken Vest go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sparebanken Vest
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Sparebanken Vest. In addition to that, Samsung Electronics is 2.47 times more volatile than Sparebanken Vest. It trades about -0.29 of its total potential returns per unit of risk. Sparebanken Vest is currently generating about 0.37 per unit of volatility. If you would invest 14,120 in Sparebanken Vest on November 7, 2024 and sell it today you would earn a total of 554.00 from holding Sparebanken Vest or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Samsung Electronics Co vs. Sparebanken Vest
Performance |
| Timeline |
| Samsung Electronics |
| Sparebanken Vest |
Samsung Electronics and Sparebanken Vest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Sparebanken Vest
The main advantage of trading using opposite Samsung Electronics and Sparebanken Vest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sparebanken Vest 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 Sparebanken Vest will offset losses from the drop in Sparebanken Vest's long position.| Samsung Electronics vs. Auto Trader Group | Samsung Electronics vs. Aptitude Software Group | Samsung Electronics vs. Universal Music Group | Samsung Electronics vs. Travel Leisure Co |
| Sparebanken Vest vs. Samsung Electronics Co | Sparebanken Vest vs. Samsung Electronics Co | Sparebanken Vest vs. Toyota Motor Corp | Sparebanken Vest vs. Reliance Industries Ltd |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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