Correlation Between Samsung Electronics and Oxford Metrics
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Oxford Metrics 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 Oxford Metrics 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 Oxford Metrics plc, you can compare the effects of market volatilities on Samsung Electronics and Oxford Metrics 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 Oxford Metrics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Oxford Metrics.
Diversification Opportunities for Samsung Electronics and Oxford Metrics
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Oxford is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Oxford Metrics plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Metrics plc 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 Oxford Metrics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Metrics plc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Oxford Metrics go up and down completely randomly.
Pair Corralation between Samsung Electronics and Oxford Metrics
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Oxford Metrics. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.07 times less risky than Oxford Metrics. The stock trades about -0.13 of its potential returns per unit of risk. The Oxford Metrics plc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,000 in Oxford Metrics plc on August 30, 2024 and sell it today you would earn a total of 420.00 from holding Oxford Metrics plc or generate 7.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Oxford Metrics plc
Performance |
| Timeline |
| Samsung Electronics |
| Oxford Metrics plc |
Samsung Electronics and Oxford Metrics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Oxford Metrics
The main advantage of trading using opposite Samsung Electronics and Oxford Metrics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Oxford Metrics 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 Oxford Metrics will offset losses from the drop in Oxford Metrics' long position.| Samsung Electronics vs. Litigation Capital Management | Samsung Electronics vs. Liontrust Asset Management | Samsung Electronics vs. Invesco Physical Silver | Samsung Electronics vs. Westlake Chemical Corp |
| Oxford Metrics vs. Samsung Electronics Co | Oxford Metrics vs. Samsung Electronics Co | Oxford Metrics vs. Hyundai Motor | Oxford Metrics 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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