Correlation Between Samsung Electronics and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Kinnevik Investment 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 Kinnevik Investment 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 Kinnevik Investment AB, you can compare the effects of market volatilities on Samsung Electronics and Kinnevik Investment 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 Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Kinnevik Investment.
Diversification Opportunities for Samsung Electronics and Kinnevik Investment
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Kinnevik is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment 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 Kinnevik Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinnevik Investment has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Samsung Electronics and Kinnevik Investment
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.73 times more return on investment than Kinnevik Investment. However, Samsung Electronics Co is 1.37 times less risky than Kinnevik Investment. It trades about -0.01 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about -0.05 per unit of risk. If you would invest 99,394 in Samsung Electronics Co on August 26, 2024 and sell it today you would lose (13,794) from holding Samsung Electronics Co or give up 13.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.62% |
| Values | Daily Returns |
Samsung Electronics Co vs. Kinnevik Investment AB
Performance |
| Timeline |
| Samsung Electronics |
| Kinnevik Investment |
Samsung Electronics and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Kinnevik Investment
The main advantage of trading using opposite Samsung Electronics and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Kinnevik Investment 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 Kinnevik Investment will offset losses from the drop in Kinnevik Investment's long position.| Samsung Electronics vs. Toyota Motor Corp | Samsung Electronics vs. SoftBank Group Corp | Samsung Electronics vs. OTP Bank Nyrt | Samsung Electronics vs. Las Vegas Sands |
| Kinnevik Investment vs. Samsung Electronics Co | Kinnevik Investment vs. Samsung Electronics Co | Kinnevik Investment vs. Hyundai Motor | Kinnevik Investment vs. Toyota Motor Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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