Correlation Between Samsung Electronics and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Endeavour 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 Endeavour 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 Endeavour Mining Corp, you can compare the effects of market volatilities on Samsung Electronics and Endeavour 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 Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Endeavour Mining.
Diversification Opportunities for Samsung Electronics and Endeavour Mining
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and Endeavour is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Endeavour Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining Corp 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 Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Endeavour Mining go up and down completely randomly.
Pair Corralation between Samsung Electronics and Endeavour Mining
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.38 times more return on investment than Endeavour Mining. However, Samsung Electronics is 1.38 times more volatile than Endeavour Mining Corp. It trades about -0.05 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about -0.24 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Endeavour Mining Corp
Performance |
| Timeline |
| Samsung Electronics |
| Endeavour Mining Corp |
Samsung Electronics and Endeavour Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Endeavour Mining
The main advantage of trading using opposite Samsung Electronics and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Endeavour 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 Endeavour Mining will offset losses from the drop in Endeavour Mining'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 |
| Endeavour Mining vs. Summit Materials Cl | Endeavour Mining vs. Applied Materials | Endeavour Mining vs. Morgan Advanced Materials | Endeavour Mining vs. Lendinvest PLC |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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