Correlation Between Samsung Electronics and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Cellnex Telecom 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 Cellnex Telecom 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 Cellnex Telecom SA, you can compare the effects of market volatilities on Samsung Electronics and Cellnex Telecom 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 Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Cellnex Telecom.
Diversification Opportunities for Samsung Electronics and Cellnex Telecom
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Samsung and Cellnex is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Cellnex Telecom SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellnex Telecom SA 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 Cellnex Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellnex Telecom SA has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Cellnex Telecom go up and down completely randomly.
Pair Corralation between Samsung Electronics and Cellnex Telecom
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 1.02 times less return on investment than Cellnex Telecom. In addition to that, Samsung Electronics is 1.77 times more volatile than Cellnex Telecom SA. It trades about 0.15 of its total potential returns per unit of risk. Cellnex Telecom SA is currently generating about 0.26 per unit of volatility. If you would invest 3,216 in Cellnex Telecom SA on December 4, 2024 and sell it today you would earn a total of 211.00 from holding Cellnex Telecom SA or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Cellnex Telecom SA
Performance |
| Timeline |
| Samsung Electronics |
| Cellnex Telecom SA |
Samsung Electronics and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Cellnex Telecom
The main advantage of trading using opposite Samsung Electronics and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Cellnex Telecom 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 Cellnex Telecom will offset losses from the drop in Cellnex Telecom's long position.| Samsung Electronics vs. InterContinental Hotels Group | Samsung Electronics vs. Bloomsbury Publishing Plc | Samsung Electronics vs. Critical Metals Plc | Samsung Electronics vs. Compagnie Plastic Omnium |
| Cellnex Telecom vs. Charter Communications Cl | Cellnex Telecom vs. Orient Telecoms | Cellnex Telecom vs. Zegona Communications Plc | Cellnex Telecom vs. Gamma Communications 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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