Correlation Between Samsung Electronics and Elmos Semiconductor
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Elmos Semiconductor 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 Elmos Semiconductor 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 Elmos Semiconductor SE, you can compare the effects of market volatilities on Samsung Electronics and Elmos Semiconductor 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 Elmos Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Elmos Semiconductor.
Diversification Opportunities for Samsung Electronics and Elmos Semiconductor
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Elmos is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor 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 Elmos Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elmos Semiconductor has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Elmos Semiconductor go up and down completely randomly.
Pair Corralation between Samsung Electronics and Elmos Semiconductor
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.7 times more return on investment than Elmos Semiconductor. However, Samsung Electronics Co is 1.42 times less risky than Elmos Semiconductor. It trades about -0.18 of its potential returns per unit of risk. Elmos Semiconductor SE is currently generating about -0.13 per unit of risk. If you would invest 112,395 in Samsung Electronics Co on August 30, 2024 and sell it today you would lose (26,595) from holding Samsung Electronics Co or give up 23.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Elmos Semiconductor SE
Performance |
| Timeline |
| Samsung Electronics |
| Elmos Semiconductor |
Samsung Electronics and Elmos Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Elmos Semiconductor
The main advantage of trading using opposite Samsung Electronics and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Elmos Semiconductor 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 Elmos Semiconductor will offset losses from the drop in Elmos Semiconductor'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 |
| Elmos Semiconductor vs. Beeks Trading | Elmos Semiconductor vs. Monks Investment Trust | Elmos Semiconductor vs. Telecom Italia SpA | Elmos Semiconductor vs. Lords Grp Trading |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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