Correlation Between Samsung Electronics and Sartorius Stedim
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sartorius Stedim 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 Sartorius Stedim 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 Sartorius Stedim Biotech, you can compare the effects of market volatilities on Samsung Electronics and Sartorius Stedim 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 Sartorius Stedim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sartorius Stedim.
Diversification Opportunities for Samsung Electronics and Sartorius Stedim
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Sartorius is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sartorius Stedim Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sartorius Stedim Biotech 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 Sartorius Stedim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sartorius Stedim Biotech has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sartorius Stedim go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sartorius Stedim
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Sartorius Stedim. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.8 times less risky than Sartorius Stedim. The stock trades about -0.04 of its potential returns per unit of risk. The Sartorius Stedim Biotech is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 33,778 in Sartorius Stedim Biotech on November 6, 2024 and sell it today you would lose (11,298) from holding Sartorius Stedim Biotech or give up 33.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Samsung Electronics Co vs. Sartorius Stedim Biotech
Performance |
| Timeline |
| Samsung Electronics |
| Sartorius Stedim Biotech |
Samsung Electronics and Sartorius Stedim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Sartorius Stedim
The main advantage of trading using opposite Samsung Electronics and Sartorius Stedim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sartorius Stedim 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 Sartorius Stedim will offset losses from the drop in Sartorius Stedim's long position.| Samsung Electronics vs. McEwen Mining | Samsung Electronics vs. Eco Animal Health | Samsung Electronics vs. Primary Health Properties | Samsung Electronics vs. Coeur Mining |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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