Correlation Between Samsung Electronics and Datagroup
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Datagroup 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 Datagroup 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 Datagroup SE, you can compare the effects of market volatilities on Samsung Electronics and Datagroup 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 Datagroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Datagroup.
Diversification Opportunities for Samsung Electronics and Datagroup
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Datagroup is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Datagroup SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datagroup 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 Datagroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datagroup SE has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Datagroup go up and down completely randomly.
Pair Corralation between Samsung Electronics and Datagroup
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Datagroup. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.08 times less risky than Datagroup. The stock trades about -0.05 of its potential returns per unit of risk. The Datagroup SE is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,975 in Datagroup SE on September 12, 2024 and sell it today you would earn a total of 685.00 from holding Datagroup SE or generate 17.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Datagroup SE
Performance |
| Timeline |
| Samsung Electronics |
| Datagroup SE |
Samsung Electronics and Datagroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Datagroup
The main advantage of trading using opposite Samsung Electronics and Datagroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Datagroup 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 Datagroup will offset losses from the drop in Datagroup's long position.| Samsung Electronics vs. Norwegian Air Shuttle | Samsung Electronics vs. GreenX Metals | Samsung Electronics vs. AMG Advanced Metallurgical | Samsung Electronics vs. Gaztransport et Technigaz |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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