Correlation Between Samsung Electronics and Tetragon Financial
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Tetragon Financial 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 Tetragon Financial 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 Tetragon Financial Group, you can compare the effects of market volatilities on Samsung Electronics and Tetragon Financial 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 Tetragon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Tetragon Financial.
Diversification Opportunities for Samsung Electronics and Tetragon Financial
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Tetragon is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Tetragon Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tetragon Financial 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 Tetragon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tetragon Financial has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Tetragon Financial go up and down completely randomly.
Pair Corralation between Samsung Electronics and Tetragon Financial
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 2.54 times less return on investment than Tetragon Financial. In addition to that, Samsung Electronics is 1.65 times more volatile than Tetragon Financial Group. It trades about 0.06 of its total potential returns per unit of risk. Tetragon Financial Group is currently generating about 0.25 per unit of volatility. If you would invest 1,415 in Tetragon Financial Group on October 11, 2024 and sell it today you would earn a total of 80.00 from holding Tetragon Financial Group or generate 5.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. Tetragon Financial Group
Performance |
Timeline |
Samsung Electronics |
Tetragon Financial |
Samsung Electronics and Tetragon Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and Tetragon Financial
The main advantage of trading using opposite Samsung Electronics and Tetragon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Tetragon Financial 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 Tetragon Financial will offset losses from the drop in Tetragon Financial's long position.Samsung Electronics vs. LBG Media PLC | Samsung Electronics vs. Verizon Communications | Samsung Electronics vs. Zinc Media Group | Samsung Electronics vs. Zoom Video Communications |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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