Correlation Between Samsung Electronics and Ameren Corp
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Ameren Corp 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 Ameren Corp 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 Ameren Corp, you can compare the effects of market volatilities on Samsung Electronics and Ameren Corp 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 Ameren Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Ameren Corp.
Diversification Opportunities for Samsung Electronics and Ameren Corp
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Ameren is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Ameren Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameren Corp 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 Ameren Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameren Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Ameren Corp go up and down completely randomly.
Pair Corralation between Samsung Electronics and Ameren Corp
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Ameren Corp. In addition to that, Samsung Electronics is 1.49 times more volatile than Ameren Corp. It trades about -0.01 of its total potential returns per unit of risk. Ameren Corp is currently generating about 0.03 per unit of volatility. If you would invest 8,371 in Ameren Corp on September 4, 2024 and sell it today you would earn a total of 965.00 from holding Ameren Corp or generate 11.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 89.76% |
| Values | Daily Returns |
Samsung Electronics Co vs. Ameren Corp
Performance |
| Timeline |
| Samsung Electronics |
| Ameren Corp |
Samsung Electronics and Ameren Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Ameren Corp
The main advantage of trading using opposite Samsung Electronics and Ameren Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Ameren Corp 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 Ameren Corp will offset losses from the drop in Ameren Corp's long position.| Samsung Electronics vs. FC Investment Trust | Samsung Electronics vs. Smithson Investment Trust | Samsung Electronics vs. Beeks Trading | Samsung Electronics vs. New Residential Investment |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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