Correlation Between Samsung Electronics and Industrivarden
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Industrivarden 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 Industrivarden 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 Industrivarden AB ser, you can compare the effects of market volatilities on Samsung Electronics and Industrivarden 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 Industrivarden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Industrivarden.
Diversification Opportunities for Samsung Electronics and Industrivarden
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and Industrivarden is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Industrivarden AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrivarden AB ser 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 Industrivarden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrivarden AB ser has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Industrivarden go up and down completely randomly.
Pair Corralation between Samsung Electronics and Industrivarden
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Industrivarden. In addition to that, Samsung Electronics is 1.74 times more volatile than Industrivarden AB ser. It trades about 0.0 of its total potential returns per unit of risk. Industrivarden AB ser is currently generating about 0.07 per unit of volatility. If you would invest 25,468 in Industrivarden AB ser on August 26, 2024 and sell it today you would earn a total of 10,392 from holding Industrivarden AB ser or generate 40.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Samsung Electronics Co vs. Industrivarden AB ser
Performance |
| Timeline |
| Samsung Electronics |
| Industrivarden AB ser |
Samsung Electronics and Industrivarden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Industrivarden
The main advantage of trading using opposite Samsung Electronics and Industrivarden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Industrivarden 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 Industrivarden will offset losses from the drop in Industrivarden's long position.| Samsung Electronics vs. Aeorema Communications Plc | Samsung Electronics vs. Silvercorp Metals | Samsung Electronics vs. Greenroc Mining PLC | Samsung Electronics vs. Verizon Communications |
| Industrivarden vs. Samsung Electronics Co | Industrivarden vs. Samsung Electronics Co | Industrivarden vs. Hyundai Motor | Industrivarden 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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