Correlation Between Samsung Electronics and Schweiter Technologies
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Schweiter 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 Schweiter 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 Schweiter Technologies AG, you can compare the effects of market volatilities on Samsung Electronics and Schweiter 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 Schweiter Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Schweiter Technologies.
Diversification Opportunities for Samsung Electronics and Schweiter Technologies
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Schweiter is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter 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 Schweiter Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweiter Technologies has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Schweiter Technologies go up and down completely randomly.
Pair Corralation between Samsung Electronics and Schweiter Technologies
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.88 times more return on investment than Schweiter Technologies. However, Samsung Electronics Co is 1.14 times less risky than Schweiter Technologies. It trades about -0.02 of its potential returns per unit of risk. Schweiter Technologies AG is currently generating about -0.04 per unit of risk. If you would invest 98,242 in Samsung Electronics Co on November 19, 2024 and sell it today you would lose (18,042) from holding Samsung Electronics Co or give up 18.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Samsung Electronics Co vs. Schweiter Technologies AG
Performance |
| Timeline |
| Samsung Electronics |
| Schweiter Technologies |
Samsung Electronics and Schweiter Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Schweiter Technologies
The main advantage of trading using opposite Samsung Electronics and Schweiter Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Schweiter 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 Schweiter Technologies will offset losses from the drop in Schweiter Technologies' long position.| Samsung Electronics vs. United Internet AG | Samsung Electronics vs. Zoom Video Communications | Samsung Electronics vs. Take Two Interactive Software | Samsung Electronics vs. Spirent Communications plc |
| Schweiter Technologies vs. Fortune Brands Home | Schweiter Technologies vs. Premier Foods PLC | Schweiter Technologies vs. Eco Animal Health | Schweiter Technologies vs. MyHealthChecked 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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