Correlation Between Samsung Electronics and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Alfa Financial 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 Alfa Financial 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 Alfa Financial Software, you can compare the effects of market volatilities on Samsung Electronics and Alfa Financial 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 Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Alfa Financial.
Diversification Opportunities for Samsung Electronics and Alfa Financial
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Alfa is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Alfa Financial go up and down completely randomly.
Pair Corralation between Samsung Electronics and Alfa Financial
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 1.88 times less return on investment than Alfa Financial. In addition to that, Samsung Electronics is 1.13 times more volatile than Alfa Financial Software. It trades about 0.01 of its total potential returns per unit of risk. Alfa Financial Software is currently generating about 0.02 per unit of volatility. If you would invest 21,650 in Alfa Financial Software on August 28, 2024 and sell it today you would earn a total of 50.00 from holding Alfa Financial Software or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Samsung Electronics Co vs. Alfa Financial Software
Performance |
| Timeline |
| Samsung Electronics |
| Alfa Financial Software |
Samsung Electronics and Alfa Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Alfa Financial
The main advantage of trading using opposite Samsung Electronics and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial'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 |
| Alfa Financial vs. Uniper SE | Alfa Financial vs. London Security Plc | Alfa Financial vs. SURETRACK MON | Alfa Financial vs. Ikigai Ventures |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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