Correlation Between Samsung Electronics and Guaranty Trust
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Guaranty Trust 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 Guaranty Trust 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 Guaranty Trust Holding, you can compare the effects of market volatilities on Samsung Electronics and Guaranty Trust 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 Guaranty Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Guaranty Trust.
Diversification Opportunities for Samsung Electronics and Guaranty Trust
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Guaranty is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Guaranty Trust Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guaranty Trust Holding 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 Guaranty Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guaranty Trust Holding has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Guaranty Trust go up and down completely randomly.
Pair Corralation between Samsung Electronics and Guaranty Trust
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Guaranty Trust. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 2.02 times less risky than Guaranty Trust. The stock trades about -0.04 of its potential returns per unit of risk. The Guaranty Trust Holding is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 190.00 in Guaranty Trust Holding on November 2, 2024 and sell it today you would earn a total of 18.00 from holding Guaranty Trust Holding or generate 9.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Guaranty Trust Holding
Performance |
| Timeline |
| Samsung Electronics |
| Guaranty Trust Holding |
Samsung Electronics and Guaranty Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Guaranty Trust
The main advantage of trading using opposite Samsung Electronics and Guaranty Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Guaranty Trust 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 Guaranty Trust will offset losses from the drop in Guaranty Trust's long position.| Samsung Electronics vs. British American Tobacco | Samsung Electronics vs. Aeorema Communications Plc | Samsung Electronics vs. Sabre Insurance Group | Samsung Electronics vs. Litigation Capital Management |
| Guaranty Trust vs. JLEN Environmental Assets | Guaranty Trust vs. Aeorema Communications Plc | Guaranty Trust vs. Batm Advanced Communications | Guaranty Trust vs. Veolia Environnement VE |
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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