Correlation Between Samsung Electronics and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Ameriprise Financial 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 Ameriprise Financial 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 Ameriprise Financial, you can compare the effects of market volatilities on Samsung Electronics and Ameriprise Financial 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 Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Ameriprise Financial.
Diversification Opportunities for Samsung Electronics and Ameriprise Financial
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Ameriprise is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial 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 Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Samsung Electronics and Ameriprise Financial
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 19.74 times less return on investment than Ameriprise Financial. In addition to that, Samsung Electronics is 1.0 times more volatile than Ameriprise Financial. It trades about 0.01 of its total potential returns per unit of risk. Ameriprise Financial is currently generating about 0.14 per unit of volatility. If you would invest 53,305 in Ameriprise Financial on October 23, 2024 and sell it today you would earn a total of 1,803 from holding Ameriprise Financial or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
Samsung Electronics Co vs. Ameriprise Financial
Performance |
| Timeline |
| Samsung Electronics |
| Ameriprise Financial |
Samsung Electronics and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Ameriprise Financial
The main advantage of trading using opposite Samsung Electronics and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Ameriprise Financial 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 Ameriprise Financial will offset losses from the drop in Ameriprise Financial's long position.| Samsung Electronics vs. Charter Communications Cl | Samsung Electronics vs. Universal Display Corp | Samsung Electronics vs. Spirent Communications plc | Samsung Electronics vs. Zegona Communications Plc |
| Ameriprise Financial vs. Home Depot | Ameriprise Financial vs. Weiss Korea Opportunity | Ameriprise Financial vs. River and Mercantile | Ameriprise Financial vs. Chrysalis Investments |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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