Correlation Between Samsung Electronics and One Media
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and One Media 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 One Media 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 One Media iP, you can compare the effects of market volatilities on Samsung Electronics and One Media 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 One Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and One Media.
Diversification Opportunities for Samsung Electronics and One Media
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and One is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and One Media iP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Media iP 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 One Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Media iP has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and One Media go up and down completely randomly.
Pair Corralation between Samsung Electronics and One Media
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.15 times more return on investment than One Media. However, Samsung Electronics is 1.15 times more volatile than One Media iP. It trades about 0.01 of its potential returns per unit of risk. One Media iP is currently generating about -0.04 per unit of risk. If you would invest 88,300 in Samsung Electronics Co on August 28, 2024 and sell it today you would lose (300.00) from holding Samsung Electronics Co or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Samsung Electronics Co vs. One Media iP
Performance |
| Timeline |
| Samsung Electronics |
| One Media iP |
Samsung Electronics and One Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and One Media
The main advantage of trading using opposite Samsung Electronics and One Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, One Media 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 One Media will offset losses from the drop in One Media'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 |
| One Media vs. Naked Wines plc | One Media vs. Cornish Metals | One Media vs. Cairo Communication SpA | One Media vs. Universal Display 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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