Correlation Between Samsung Electronics and CATCo Reinsurance
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and CATCo Reinsurance 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 CATCo Reinsurance 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 CATCo Reinsurance Opportunities, you can compare the effects of market volatilities on Samsung Electronics and CATCo Reinsurance 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 CATCo Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and CATCo Reinsurance.
Diversification Opportunities for Samsung Electronics and CATCo Reinsurance
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and CATCo is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and CATCo Reinsurance Opportunitie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATCo Reinsurance 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 CATCo Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATCo Reinsurance has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and CATCo Reinsurance go up and down completely randomly.
Pair Corralation between Samsung Electronics and CATCo Reinsurance
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the CATCo Reinsurance. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 3.97 times less risky than CATCo Reinsurance. The stock trades about 0.0 of its potential returns per unit of risk. The CATCo Reinsurance Opportunities is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,500 in CATCo Reinsurance Opportunities on August 26, 2024 and sell it today you would earn a total of 1,250 from holding CATCo Reinsurance Opportunities or generate 50.0% 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. CATCo Reinsurance Opportunitie
Performance |
| Timeline |
| Samsung Electronics |
| CATCo Reinsurance |
Samsung Electronics and CATCo Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and CATCo Reinsurance
The main advantage of trading using opposite Samsung Electronics and CATCo Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, CATCo Reinsurance 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 CATCo Reinsurance will offset losses from the drop in CATCo Reinsurance'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 |
| CATCo Reinsurance vs. Samsung Electronics Co | CATCo Reinsurance vs. Samsung Electronics Co | CATCo Reinsurance vs. Hyundai Motor | CATCo Reinsurance vs. Toyota Motor Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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