Correlation Between Samsung Electronics and Litigation Capital
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Litigation Capital 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 Litigation Capital 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 Litigation Capital Management, you can compare the effects of market volatilities on Samsung Electronics and Litigation Capital 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 Litigation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Litigation Capital.
Diversification Opportunities for Samsung Electronics and Litigation Capital
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Litigation is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Litigation Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litigation Capital 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 Litigation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litigation Capital has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Litigation Capital go up and down completely randomly.
Pair Corralation between Samsung Electronics and Litigation Capital
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Litigation Capital. In addition to that, Samsung Electronics is 3.89 times more volatile than Litigation Capital Management. It trades about -0.06 of its total potential returns per unit of risk. Litigation Capital Management is currently generating about 0.19 per unit of volatility. If you would invest 11,350 in Litigation Capital Management on September 2, 2024 and sell it today you would earn a total of 350.00 from holding Litigation Capital Management or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Litigation Capital Management
Performance |
| Timeline |
| Samsung Electronics |
| Litigation Capital |
Samsung Electronics and Litigation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Litigation Capital
The main advantage of trading using opposite Samsung Electronics and Litigation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Litigation Capital 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 Litigation Capital will offset losses from the drop in Litigation Capital's long position.| Samsung Electronics vs. Playtech Plc | Samsung Electronics vs. Schweiter Technologies AG | Samsung Electronics vs. Datalogic | Samsung Electronics vs. Teradata Corp |
| Litigation Capital vs. Toyota Motor Corp | Litigation Capital vs. SoftBank Group Corp | Litigation Capital vs. OTP Bank Nyrt | Litigation Capital vs. Las Vegas Sands |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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