Correlation Between Samsung Electronics and Freddie Mac
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Freddie Mac 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 Freddie Mac 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 Freddie Mac, you can compare the effects of market volatilities on Samsung Electronics and Freddie Mac 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 Freddie Mac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Freddie Mac.
Diversification Opportunities for Samsung Electronics and Freddie Mac
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Freddie is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Freddie Mac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freddie Mac 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 Freddie Mac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freddie Mac has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Freddie Mac go up and down completely randomly.
Pair Corralation between Samsung Electronics and Freddie Mac
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Freddie Mac. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 3.06 times less risky than Freddie Mac. The stock trades about -0.1 of its potential returns per unit of risk. The Freddie Mac is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 140.00 in Freddie Mac on August 31, 2024 and sell it today you would earn a total of 168.00 from holding Freddie Mac or generate 120.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Freddie Mac
Performance |
| Timeline |
| Samsung Electronics |
| Freddie Mac |
Samsung Electronics and Freddie Mac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Freddie Mac
The main advantage of trading using opposite Samsung Electronics and Freddie Mac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Freddie Mac 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 Freddie Mac will offset losses from the drop in Freddie Mac's long position.| Samsung Electronics vs. Kaufman Et Broad | Samsung Electronics vs. Allianz Technology Trust | Samsung Electronics vs. Monster Beverage Corp | Samsung Electronics vs. Gaztransport et Technigaz |
| Freddie Mac vs. Lowland Investment Co | Freddie Mac vs. Ryanair Holdings plc | Freddie Mac vs. Air Products Chemicals | Freddie Mac vs. Delta Air Lines |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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