Correlation Between Samsung Electronics and SL Private
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and SL Private 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 SL Private 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 SL Private Equity, you can compare the effects of market volatilities on Samsung Electronics and SL Private 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 SL Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and SL Private.
Diversification Opportunities for Samsung Electronics and SL Private
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Samsung and SLPE is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and SL Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Private Equity 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 SL Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Private Equity has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and SL Private go up and down completely randomly.
Pair Corralation between Samsung Electronics and SL Private
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the SL Private. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 2.09 times less risky than SL Private. The stock trades about -0.06 of its potential returns per unit of risk. The SL Private Equity is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 45,196 in SL Private Equity on September 14, 2024 and sell it today you would earn a total of 9,804 from holding SL Private Equity or generate 21.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Samsung Electronics Co vs. SL Private Equity
Performance |
| Timeline |
| Samsung Electronics |
| SL Private Equity |
Samsung Electronics and SL Private Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and SL Private
The main advantage of trading using opposite Samsung Electronics and SL Private positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, SL Private 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 SL Private will offset losses from the drop in SL Private'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 |
| SL Private vs. Samsung Electronics Co | SL Private vs. Samsung Electronics Co | SL Private vs. Hyundai Motor | SL Private vs. Reliance Industries Ltd |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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