Correlation Between Samsung Electronics and MT Bank
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and MT Bank 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 MT Bank 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 MT Bank Corp, you can compare the effects of market volatilities on Samsung Electronics and MT Bank 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 MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and MT Bank.
Diversification Opportunities for Samsung Electronics and MT Bank
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and 0JW2 is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and MT Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank Corp 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 MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and MT Bank go up and down completely randomly.
Pair Corralation between Samsung Electronics and MT Bank
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the MT Bank. In addition to that, Samsung Electronics is 1.13 times more volatile than MT Bank Corp. It trades about -0.15 of its total potential returns per unit of risk. MT Bank Corp is currently generating about 0.12 per unit of volatility. If you would invest 14,803 in MT Bank Corp on September 22, 2024 and sell it today you would earn a total of 4,121 from holding MT Bank Corp or generate 27.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.69% |
| Values | Daily Returns |
Samsung Electronics Co vs. MT Bank Corp
Performance |
| Timeline |
| Samsung Electronics |
| MT Bank Corp |
Samsung Electronics and MT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and MT Bank
The main advantage of trading using opposite Samsung Electronics and MT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, MT Bank 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 MT Bank will offset losses from the drop in MT Bank's long position.| Samsung Electronics vs. Rockfire Resources plc | Samsung Electronics vs. Tlou Energy | Samsung Electronics vs. Ikigai Ventures | Samsung Electronics vs. Falcon Oil Gas |
| MT Bank vs. Uniper SE | MT Bank vs. Mulberry Group PLC | MT Bank vs. London Security Plc | MT Bank vs. Triad Group PLC |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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