Correlation Between Samsung Electronics and Uniper SE
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Uniper SE 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 Uniper SE 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 Uniper SE, you can compare the effects of market volatilities on Samsung Electronics and Uniper SE 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 Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Uniper SE.
Diversification Opportunities for Samsung Electronics and Uniper SE
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Samsung and Uniper is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE 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 Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Uniper SE go up and down completely randomly.
Pair Corralation between Samsung Electronics and Uniper SE
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Uniper SE. In addition to that, Samsung Electronics is 1.39 times more volatile than Uniper SE. It trades about -0.04 of its total potential returns per unit of risk. Uniper SE is currently generating about -0.04 per unit of volatility. If you would invest 4,562 in Uniper SE on August 31, 2024 and sell it today you would lose (109.00) from holding Uniper SE or give up 2.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. Uniper SE
Performance |
| Timeline |
| Samsung Electronics |
| Uniper SE |
Samsung Electronics and Uniper SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Uniper SE
The main advantage of trading using opposite Samsung Electronics and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Uniper SE 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 Uniper SE will offset losses from the drop in Uniper SE's long position.| Samsung Electronics vs. Kaufman Et Broad | Samsung Electronics vs. Allianz Technology Trust | Samsung Electronics vs. Monster Beverage Corp | Samsung Electronics vs. Gaztransport et Technigaz |
| Uniper SE vs. United Utilities Group | Uniper SE vs. Lords Grp Trading | Uniper SE vs. TR Property Investment | Uniper SE vs. JB Hunt Transport |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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