Correlation Between Samsung Electronics and AfriTin Mining
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and AfriTin Mining 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 AfriTin Mining 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 AfriTin Mining, you can compare the effects of market volatilities on Samsung Electronics and AfriTin Mining 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 AfriTin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and AfriTin Mining.
Diversification Opportunities for Samsung Electronics and AfriTin Mining
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and AfriTin is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and AfriTin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfriTin Mining 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 AfriTin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfriTin Mining has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and AfriTin Mining go up and down completely randomly.
Pair Corralation between Samsung Electronics and AfriTin Mining
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.56 times more return on investment than AfriTin Mining. However, Samsung Electronics Co is 1.78 times less risky than AfriTin Mining. It trades about -0.14 of its potential returns per unit of risk. AfriTin Mining is currently generating about -0.08 per unit of risk. If you would invest 107,024 in Samsung Electronics Co on November 3, 2024 and sell it today you would lose (32,724) from holding Samsung Electronics Co or give up 30.58% 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. AfriTin Mining
Performance |
| Timeline |
| Samsung Electronics |
| AfriTin Mining |
Samsung Electronics and AfriTin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and AfriTin Mining
The main advantage of trading using opposite Samsung Electronics and AfriTin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, AfriTin Mining 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 AfriTin Mining will offset losses from the drop in AfriTin Mining's long position.| Samsung Electronics vs. Playtech Plc | Samsung Electronics vs. Monks Investment Trust | Samsung Electronics vs. New Residential Investment | Samsung Electronics vs. Herald Investment Trust |
| AfriTin Mining vs. Batm Advanced Communications | AfriTin Mining vs. Dairy Farm International | AfriTin Mining vs. Austevoll Seafood ASA | AfriTin Mining vs. Grieg Seafood |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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