Correlation Between Samsung Electronics and Alternative Liquidity
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Alternative Liquidity 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 Alternative Liquidity 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 Alternative Liquidity, you can compare the effects of market volatilities on Samsung Electronics and Alternative Liquidity 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 Alternative Liquidity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Alternative Liquidity.
Diversification Opportunities for Samsung Electronics and Alternative Liquidity
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Alternative is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Alternative Liquidity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternative Liquidity 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 Alternative Liquidity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternative Liquidity has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Alternative Liquidity go up and down completely randomly.
Pair Corralation between Samsung Electronics and Alternative Liquidity
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Alternative Liquidity. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.95 times less risky than Alternative Liquidity. The stock trades about -0.02 of its potential returns per unit of risk. The Alternative Liquidity is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Alternative Liquidity on October 20, 2024 and sell it today you would earn a total of 0.70 from holding Alternative Liquidity or generate 17.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Alternative Liquidity
Performance |
| Timeline |
| Samsung Electronics |
| Alternative Liquidity |
Samsung Electronics and Alternative Liquidity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Alternative Liquidity
The main advantage of trading using opposite Samsung Electronics and Alternative Liquidity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Alternative Liquidity 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 Alternative Liquidity will offset losses from the drop in Alternative Liquidity'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 |
| Alternative Liquidity vs. Beowulf Mining | Alternative Liquidity vs. AfriTin Mining | Alternative Liquidity vs. Griffin Mining | Alternative Liquidity vs. Pan American Silver |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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