Correlation Between Samsung Electronics and Morgan Advanced
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Morgan Advanced 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 Morgan Advanced 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 Morgan Advanced Materials, you can compare the effects of market volatilities on Samsung Electronics and Morgan Advanced 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 Morgan Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Morgan Advanced.
Diversification Opportunities for Samsung Electronics and Morgan Advanced
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Samsung and Morgan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Morgan Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Advanced Materials 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 Morgan Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Advanced Materials has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Morgan Advanced go up and down completely randomly.
Pair Corralation between Samsung Electronics and Morgan Advanced
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Morgan Advanced. In addition to that, Samsung Electronics is 2.39 times more volatile than Morgan Advanced Materials. It trades about 0.0 of its total potential returns per unit of risk. Morgan Advanced Materials is currently generating about 0.1 per unit of volatility. If you would invest 25,400 in Morgan Advanced Materials on August 26, 2024 and sell it today you would earn a total of 600.00 from holding Morgan Advanced Materials or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Morgan Advanced Materials
Performance |
| Timeline |
| Samsung Electronics |
| Morgan Advanced Materials |
Samsung Electronics and Morgan Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Morgan Advanced
The main advantage of trading using opposite Samsung Electronics and Morgan Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Morgan Advanced 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 Morgan Advanced will offset losses from the drop in Morgan Advanced's long position.| Samsung Electronics vs. Toyota Motor Corp | Samsung Electronics vs. SoftBank Group Corp | Samsung Electronics vs. OTP Bank Nyrt | Samsung Electronics vs. Las Vegas Sands |
| Morgan Advanced vs. Samsung Electronics Co | Morgan Advanced vs. Samsung Electronics Co | Morgan Advanced vs. Hyundai Motor | Morgan Advanced 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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