Correlation Between Samsung Electronics and Indutrade
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Indutrade 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 Indutrade 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 Indutrade AB, you can compare the effects of market volatilities on Samsung Electronics and Indutrade 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 Indutrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Indutrade.
Diversification Opportunities for Samsung Electronics and Indutrade
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and Indutrade is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Indutrade AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indutrade AB 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 Indutrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indutrade AB has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Indutrade go up and down completely randomly.
Pair Corralation between Samsung Electronics and Indutrade
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Indutrade. In addition to that, Samsung Electronics is 1.45 times more volatile than Indutrade AB. It trades about -0.12 of its total potential returns per unit of risk. Indutrade AB is currently generating about 0.02 per unit of volatility. If you would invest 29,290 in Indutrade AB on October 30, 2024 and sell it today you would earn a total of 310.00 from holding Indutrade AB or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Samsung Electronics Co vs. Indutrade AB
Performance |
| Timeline |
| Samsung Electronics |
| Indutrade AB |
Samsung Electronics and Indutrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Indutrade
The main advantage of trading using opposite Samsung Electronics and Indutrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Indutrade 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 Indutrade will offset losses from the drop in Indutrade's long position.| Samsung Electronics vs. Naturhouse Health SA | Samsung Electronics vs. JB Hunt Transport | Samsung Electronics vs. Spire Healthcare Group | Samsung Electronics vs. CVS Health Corp |
| Indutrade vs. Berkshire Hathaway | Indutrade vs. Samsung Electronics Co | Indutrade vs. Samsung Electronics Co | Indutrade vs. Chocoladefabriken Lindt Spruengli |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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