Correlation Between Samsung Electronics and Eco Animal
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Eco Animal 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 Eco Animal 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 Eco Animal Health, you can compare the effects of market volatilities on Samsung Electronics and Eco Animal 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 Eco Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Eco Animal.
Diversification Opportunities for Samsung Electronics and Eco Animal
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Eco is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Eco Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Animal Health 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 Eco Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Animal Health has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Eco Animal go up and down completely randomly.
Pair Corralation between Samsung Electronics and Eco Animal
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.69 times more return on investment than Eco Animal. However, Samsung Electronics Co is 1.46 times less risky than Eco Animal. It trades about -0.01 of its potential returns per unit of risk. Eco Animal Health is currently generating about -0.03 per unit of risk. If you would invest 100,161 in Samsung Electronics Co on August 30, 2024 and sell it today you would lose (15,061) from holding Samsung Electronics Co or give up 15.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Samsung Electronics Co vs. Eco Animal Health
Performance |
| Timeline |
| Samsung Electronics |
| Eco Animal Health |
Samsung Electronics and Eco Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Eco Animal
The main advantage of trading using opposite Samsung Electronics and Eco Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Eco Animal 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 Eco Animal will offset losses from the drop in Eco Animal's long position.| Samsung Electronics vs. Ondine Biomedical | Samsung Electronics vs. Europa Metals | Samsung Electronics vs. Lendinvest PLC | Samsung Electronics vs. Neometals |
| Eco Animal vs. Samsung Electronics Co | Eco Animal vs. Samsung Electronics Co | Eco Animal vs. Hyundai Motor | Eco Animal 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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