Correlation Between Samsung Electronics and L3Harris Technologies
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and L3Harris Technologies 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 L3Harris Technologies 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 L3Harris Technologies, you can compare the effects of market volatilities on Samsung Electronics and L3Harris Technologies 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 L3Harris Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and L3Harris Technologies.
Diversification Opportunities for Samsung Electronics and L3Harris Technologies
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and L3Harris is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and L3Harris Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L3Harris Technologies 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 L3Harris Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L3Harris Technologies has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and L3Harris Technologies go up and down completely randomly.
Pair Corralation between Samsung Electronics and L3Harris Technologies
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the L3Harris Technologies. In addition to that, Samsung Electronics is 1.19 times more volatile than L3Harris Technologies. It trades about -0.04 of its total potential returns per unit of risk. L3Harris Technologies is currently generating about 0.06 per unit of volatility. If you would invest 18,237 in L3Harris Technologies on August 31, 2024 and sell it today you would earn a total of 6,372 from holding L3Harris Technologies or generate 34.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Samsung Electronics Co vs. L3Harris Technologies
Performance |
| Timeline |
| Samsung Electronics |
| L3Harris Technologies |
Samsung Electronics and L3Harris Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and L3Harris Technologies
The main advantage of trading using opposite Samsung Electronics and L3Harris Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, L3Harris Technologies 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 L3Harris Technologies will offset losses from the drop in L3Harris Technologies' 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 |
| L3Harris Technologies vs. Monks Investment Trust | L3Harris Technologies vs. Broadridge Financial Solutions | L3Harris Technologies vs. Smithson Investment Trust | L3Harris Technologies vs. Trainline 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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