Correlation Between Samsung Electronics and Octopus Aim
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Octopus Aim 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 Octopus Aim 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 Octopus Aim Vct, you can compare the effects of market volatilities on Samsung Electronics and Octopus Aim 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 Octopus Aim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Octopus Aim.
Diversification Opportunities for Samsung Electronics and Octopus Aim
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Octopus is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Octopus Aim Vct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Octopus Aim Vct 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 Octopus Aim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Octopus Aim Vct has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Octopus Aim go up and down completely randomly.
Pair Corralation between Samsung Electronics and Octopus Aim
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Octopus Aim. In addition to that, Samsung Electronics is 4.74 times more volatile than Octopus Aim Vct. It trades about -0.17 of its total potential returns per unit of risk. Octopus Aim Vct is currently generating about -0.06 per unit of volatility. If you would invest 4,998 in Octopus Aim Vct on September 23, 2024 and sell it today you would lose (73.00) from holding Octopus Aim Vct or give up 1.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Octopus Aim Vct
Performance |
| Timeline |
| Samsung Electronics |
| Octopus Aim Vct |
Samsung Electronics and Octopus Aim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Octopus Aim
The main advantage of trading using opposite Samsung Electronics and Octopus Aim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Octopus Aim 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 Octopus Aim will offset losses from the drop in Octopus Aim's long position.| Samsung Electronics vs. Rockfire Resources plc | Samsung Electronics vs. Tlou Energy | Samsung Electronics vs. Ikigai Ventures | Samsung Electronics vs. Falcon Oil Gas |
| Octopus Aim vs. Samsung Electronics Co | Octopus Aim vs. Samsung Electronics Co | Octopus Aim vs. Hyundai Motor | Octopus Aim 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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