Correlation Between Samsung Electronics and Albion Technology
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Albion Technology 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 Albion Technology 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 Albion Technology General, you can compare the effects of market volatilities on Samsung Electronics and Albion Technology 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 Albion Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Albion Technology.
Diversification Opportunities for Samsung Electronics and Albion Technology
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Albion is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Albion Technology General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albion Technology General 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 Albion Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albion Technology General has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Albion Technology go up and down completely randomly.
Pair Corralation between Samsung Electronics and Albion Technology
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 9.7 times more return on investment than Albion Technology. However, Samsung Electronics is 9.7 times more volatile than Albion Technology General. It trades about -0.02 of its potential returns per unit of risk. Albion Technology General is currently generating about -0.23 per unit of risk. If you would invest 76,600 in Samsung Electronics Co on October 20, 2024 and sell it today you would lose (700.00) from holding Samsung Electronics Co or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Albion Technology General
Performance |
| Timeline |
| Samsung Electronics |
| Albion Technology General |
Samsung Electronics and Albion Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Albion Technology
The main advantage of trading using opposite Samsung Electronics and Albion Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Albion Technology 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 Albion Technology will offset losses from the drop in Albion Technology's long position.| Samsung Electronics vs. Tatton Asset Management | Samsung Electronics vs. Sabien Technology Group | Samsung Electronics vs. Impax Asset Management | Samsung Electronics vs. mobilezone holding AG |
| Albion Technology vs. Tatton Asset Management | Albion Technology vs. JLEN Environmental Assets | Albion Technology vs. Cairo Communication SpA | Albion Technology vs. Jupiter Fund Management |
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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