Correlation Between Samsung Electronics and Canadian General
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Canadian General 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 Canadian General 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 Canadian General Investments, you can compare the effects of market volatilities on Samsung Electronics and Canadian General 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 Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Canadian General.
Diversification Opportunities for Samsung Electronics and Canadian General
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Canadian is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General Inv 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 Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Canadian General go up and down completely randomly.
Pair Corralation between Samsung Electronics and Canadian General
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 2.01 times more return on investment than Canadian General. However, Samsung Electronics is 2.01 times more volatile than Canadian General Investments. It trades about 0.06 of its potential returns per unit of risk. Canadian General Investments is currently generating about -0.21 per unit of risk. If you would invest 78,400 in Samsung Electronics Co on October 11, 2024 and sell it today you would earn a total of 1,500 from holding Samsung Electronics Co or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Canadian General Investments
Performance |
| Timeline |
| Samsung Electronics |
| Canadian General Inv |
Samsung Electronics and Canadian General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Canadian General
The main advantage of trading using opposite Samsung Electronics and Canadian General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Canadian General 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 Canadian General will offset losses from the drop in Canadian General's long position.| Samsung Electronics vs. LBG Media PLC | Samsung Electronics vs. Verizon Communications | Samsung Electronics vs. Zinc Media Group | Samsung Electronics vs. Zoom Video Communications |
| Canadian General vs. One Media iP | Canadian General vs. LBG Media PLC | Canadian General vs. Cornish Metals | Canadian General vs. Jacquet Metal Service |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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