Correlation Between Samsung Electronics and Zegona Communications
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Zegona Communications 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 Zegona Communications 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 Zegona Communications Plc, you can compare the effects of market volatilities on Samsung Electronics and Zegona Communications 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 Zegona Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Zegona Communications.
Diversification Opportunities for Samsung Electronics and Zegona Communications
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Zegona is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Zegona Communications Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zegona Communications 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 Zegona Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zegona Communications Plc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Zegona Communications go up and down completely randomly.
Pair Corralation between Samsung Electronics and Zegona Communications
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Zegona Communications. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.63 times less risky than Zegona Communications. The stock trades about -0.04 of its potential returns per unit of risk. The Zegona Communications Plc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 18,300 in Zegona Communications Plc on August 28, 2024 and sell it today you would earn a total of 13,900 from holding Zegona Communications Plc or generate 75.96% 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. Zegona Communications Plc
Performance |
| Timeline |
| Samsung Electronics |
| Zegona Communications Plc |
Samsung Electronics and Zegona Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Zegona Communications
The main advantage of trading using opposite Samsung Electronics and Zegona Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Zegona Communications 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 Zegona Communications will offset losses from the drop in Zegona Communications' 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 |
| Zegona Communications vs. SupplyMe Capital PLC | Zegona Communications vs. Premier African Minerals | Zegona Communications vs. SANTANDER UK 8 | Zegona Communications vs. Vodafone Group PLC |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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