Correlation Between Samsung Electronics and Telecom Italia
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Telecom Italia 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 Telecom Italia 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 Telecom Italia SpA, you can compare the effects of market volatilities on Samsung Electronics and Telecom Italia 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 Telecom Italia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Telecom Italia.
Diversification Opportunities for Samsung Electronics and Telecom Italia
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Samsung and Telecom is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Telecom Italia SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Italia SpA 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 Telecom Italia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Italia SpA has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Telecom Italia go up and down completely randomly.
Pair Corralation between Samsung Electronics and Telecom Italia
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Telecom Italia. In addition to that, Samsung Electronics is 1.1 times more volatile than Telecom Italia SpA. It trades about -0.15 of its total potential returns per unit of risk. Telecom Italia SpA is currently generating about -0.09 per unit of volatility. If you would invest 30.00 in Telecom Italia SpA on September 5, 2024 and sell it today you would lose (3.00) from holding Telecom Italia SpA or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Telecom Italia SpA
Performance |
| Timeline |
| Samsung Electronics |
| Telecom Italia SpA |
Samsung Electronics and Telecom Italia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Telecom Italia
The main advantage of trading using opposite Samsung Electronics and Telecom Italia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Telecom Italia 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 Telecom Italia will offset losses from the drop in Telecom Italia's long position.| Samsung Electronics vs. Ashtead Technology Holdings | Samsung Electronics vs. Invesco Physical Silver | Samsung Electronics vs. Pfeiffer Vacuum Technology | Samsung Electronics vs. Caledonia Mining |
| Telecom Italia vs. Samsung Electronics Co | Telecom Italia vs. Samsung Electronics Co | Telecom Italia vs. Hyundai Motor | Telecom Italia 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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