Correlation Between Samsung Electronics and Aurora Investment
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Aurora Investment 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 Aurora Investment 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 Aurora Investment Trust, you can compare the effects of market volatilities on Samsung Electronics and Aurora Investment 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 Aurora Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Aurora Investment.
Diversification Opportunities for Samsung Electronics and Aurora Investment
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Aurora is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Aurora Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Investment Trust 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 Aurora Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Investment Trust has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Aurora Investment go up and down completely randomly.
Pair Corralation between Samsung Electronics and Aurora Investment
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 2.72 times more return on investment than Aurora Investment. However, Samsung Electronics is 2.72 times more volatile than Aurora Investment Trust. It trades about -0.05 of its potential returns per unit of risk. Aurora Investment Trust is currently generating about -0.14 per unit of risk. If you would invest 87,200 in Samsung Electronics Co on September 1, 2024 and sell it today you would lose (3,400) from holding Samsung Electronics Co or give up 3.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Aurora Investment Trust
Performance |
| Timeline |
| Samsung Electronics |
| Aurora Investment Trust |
Samsung Electronics and Aurora Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Aurora Investment
The main advantage of trading using opposite Samsung Electronics and Aurora Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Aurora Investment 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 Aurora Investment will offset losses from the drop in Aurora Investment's long position.| Samsung Electronics vs. Roebuck Food Group | Samsung Electronics vs. Molson Coors Beverage | Samsung Electronics vs. United Utilities Group | Samsung Electronics vs. Premier Foods PLC |
| Aurora Investment vs. Toyota Motor Corp | Aurora Investment vs. SoftBank Group Corp | Aurora Investment vs. OTP Bank Nyrt | Aurora Investment vs. Las Vegas Sands |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Commodity Directory Find actively traded commodities issued by global exchanges |