Correlation Between Samsung Electronics and Light Science
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Light Science 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 Light Science 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 Light Science Technologies, you can compare the effects of market volatilities on Samsung Electronics and Light Science 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 Light Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Light Science.
Diversification Opportunities for Samsung Electronics and Light Science
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and Light is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Light Science Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Science Techno 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 Light Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Science Techno has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Light Science go up and down completely randomly.
Pair Corralation between Samsung Electronics and Light Science
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.57 times more return on investment than Light Science. However, Samsung Electronics Co is 1.76 times less risky than Light Science. It trades about 0.07 of its potential returns per unit of risk. Light Science Technologies is currently generating about -0.32 per unit of risk. If you would invest 75,100 in Samsung Electronics Co on October 29, 2024 and sell it today you would earn a total of 1,400 from holding Samsung Electronics Co or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Light Science Technologies
Performance |
| Timeline |
| Samsung Electronics |
| Light Science Techno |
Samsung Electronics and Light Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Light Science
The main advantage of trading using opposite Samsung Electronics and Light Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Light Science 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 Light Science will offset losses from the drop in Light Science's long position.| Samsung Electronics vs. Monster Beverage Corp | Samsung Electronics vs. Young Cos Brewery | Samsung Electronics vs. Flow Traders NV | Samsung Electronics vs. LBG Media PLC |
| Light Science vs. Grieg Seafood | Light Science vs. Golden Metal Resources | Light Science vs. Bell Food Group | Light Science vs. Edita Food Industries |
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 Stocks Directory module to find actively traded stocks across global markets.
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