Correlation Between Samsung Electronics and Odfjell Drilling
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Odfjell Drilling 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 Odfjell Drilling 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 Odfjell Drilling, you can compare the effects of market volatilities on Samsung Electronics and Odfjell Drilling 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 Odfjell Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Odfjell Drilling.
Diversification Opportunities for Samsung Electronics and Odfjell Drilling
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Odfjell is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Odfjell Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odfjell Drilling 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 Odfjell Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odfjell Drilling has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Odfjell Drilling go up and down completely randomly.
Pair Corralation between Samsung Electronics and Odfjell Drilling
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Odfjell Drilling. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.13 times less risky than Odfjell Drilling. The stock trades about -0.07 of its potential returns per unit of risk. The Odfjell Drilling is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,813 in Odfjell Drilling on September 12, 2024 and sell it today you would earn a total of 1,295 from holding Odfjell Drilling or generate 33.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Samsung Electronics Co vs. Odfjell Drilling
Performance |
| Timeline |
| Samsung Electronics |
| Odfjell Drilling |
Samsung Electronics and Odfjell Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Odfjell Drilling
The main advantage of trading using opposite Samsung Electronics and Odfjell Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Odfjell Drilling 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 Odfjell Drilling will offset losses from the drop in Odfjell Drilling's long position.| Samsung Electronics vs. Norwegian Air Shuttle | Samsung Electronics vs. GreenX Metals | Samsung Electronics vs. AMG Advanced Metallurgical | Samsung Electronics vs. Gaztransport et Technigaz |
| Odfjell Drilling vs. GoldMining | Odfjell Drilling vs. Playtech Plc | Odfjell Drilling vs. Silvercorp Metals | Odfjell Drilling vs. Gaztransport et Technigaz |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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