Correlation Between Samsung Electronics and Sparebank
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sparebank 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 Sparebank 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 Sparebank 1 SR, you can compare the effects of market volatilities on Samsung Electronics and Sparebank 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 Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sparebank.
Diversification Opportunities for Samsung Electronics and Sparebank
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Sparebank is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sparebank 1 SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 SR 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 Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebank 1 SR has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sparebank go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sparebank
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Sparebank. In addition to that, Samsung Electronics is 2.0 times more volatile than Sparebank 1 SR. It trades about -0.07 of its total potential returns per unit of risk. Sparebank 1 SR is currently generating about -0.02 per unit of volatility. If you would invest 14,620 in Sparebank 1 SR on August 31, 2024 and sell it today you would lose (140.00) from holding Sparebank 1 SR or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. Sparebank 1 SR
Performance |
| Timeline |
| Samsung Electronics |
| Sparebank 1 SR |
Samsung Electronics and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Sparebank
The main advantage of trading using opposite Samsung Electronics and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sparebank 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 Sparebank will offset losses from the drop in Sparebank'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 |
| Sparebank vs. Neometals | Sparebank vs. Coor Service Management | Sparebank vs. Aeorema Communications Plc | Sparebank 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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