Correlation Between Samsung Electronics and AP Moeller
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and AP Moeller 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 AP Moeller 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 AP Moeller , you can compare the effects of market volatilities on Samsung Electronics and AP Moeller 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 AP Moeller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and AP Moeller.
Diversification Opportunities for Samsung Electronics and AP Moeller
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and 0O77 is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and AP Moeller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Moeller 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 AP Moeller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Moeller has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and AP Moeller go up and down completely randomly.
Pair Corralation between Samsung Electronics and AP Moeller
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the AP Moeller. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.55 times less risky than AP Moeller. The stock trades about -0.04 of its potential returns per unit of risk. The AP Moeller is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,158,908 in AP Moeller on September 2, 2024 and sell it today you would earn a total of 13,842 from holding AP Moeller or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. AP Moeller
Performance |
| Timeline |
| Samsung Electronics |
| AP Moeller |
Samsung Electronics and AP Moeller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and AP Moeller
The main advantage of trading using opposite Samsung Electronics and AP Moeller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, AP Moeller 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 AP Moeller will offset losses from the drop in AP Moeller's long position.| Samsung Electronics vs. Playtech Plc | Samsung Electronics vs. Schweiter Technologies AG | Samsung Electronics vs. Datalogic | Samsung Electronics vs. Teradata Corp |
| AP Moeller vs. Neometals | AP Moeller vs. Coor Service Management | AP Moeller vs. Aeorema Communications Plc | AP Moeller vs. JLEN Environmental Assets |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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