Correlation Between Samsung Electronics and Chemours
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Chemours 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 Chemours 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 Chemours Co, you can compare the effects of market volatilities on Samsung Electronics and Chemours 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 Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Chemours.
Diversification Opportunities for Samsung Electronics and Chemours
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Chemours is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours 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 Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Chemours go up and down completely randomly.
Pair Corralation between Samsung Electronics and Chemours
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Chemours. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.06 times less risky than Chemours. The stock trades about -0.05 of its potential returns per unit of risk. The Chemours Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,953 in Chemours Co on September 12, 2024 and sell it today you would earn a total of 52.00 from holding Chemours Co or generate 2.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. Chemours Co
Performance |
| Timeline |
| Samsung Electronics |
| Chemours |
Samsung Electronics and Chemours Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Chemours
The main advantage of trading using opposite Samsung Electronics and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Chemours 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 Chemours will offset losses from the drop in Chemours' long position.| Samsung Electronics vs. Norwegian Air Shuttle | Samsung Electronics vs. GreenX Metals | Samsung Electronics vs. AMG Advanced Metallurgical | Samsung Electronics vs. Gaztransport et Technigaz |
| Chemours vs. Ameriprise Financial | Chemours vs. Royal Bank of | Chemours vs. Komercni Banka | Chemours vs. European Metals Holdings |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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