Correlation Between Samsung Electronics and Tomra Systems
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Tomra Systems 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 Tomra Systems 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 Tomra Systems ASA, you can compare the effects of market volatilities on Samsung Electronics and Tomra Systems 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 Tomra Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Tomra Systems.
Diversification Opportunities for Samsung Electronics and Tomra Systems
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and Tomra is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Tomra Systems ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tomra Systems ASA 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 Tomra Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tomra Systems ASA has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Tomra Systems go up and down completely randomly.
Pair Corralation between Samsung Electronics and Tomra Systems
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Tomra Systems. In addition to that, Samsung Electronics is 1.15 times more volatile than Tomra Systems ASA. It trades about -0.03 of its total potential returns per unit of risk. Tomra Systems ASA is currently generating about 0.01 per unit of volatility. If you would invest 15,110 in Tomra Systems ASA on September 12, 2024 and sell it today you would earn a total of 4.00 from holding Tomra Systems ASA or generate 0.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Tomra Systems ASA
Performance |
| Timeline |
| Samsung Electronics |
| Tomra Systems ASA |
Samsung Electronics and Tomra Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Tomra Systems
The main advantage of trading using opposite Samsung Electronics and Tomra Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Tomra Systems 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 Tomra Systems will offset losses from the drop in Tomra Systems' long position.| Samsung Electronics vs. McEwen Mining | Samsung Electronics vs. United Utilities Group | Samsung Electronics vs. Coor Service Management | Samsung Electronics vs. Jupiter Fund Management |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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