Correlation Between Samsung Electronics and Targa Resources
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Targa Resources 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 Targa Resources 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 Targa Resources Corp, you can compare the effects of market volatilities on Samsung Electronics and Targa Resources 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 Targa Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Targa Resources.
Diversification Opportunities for Samsung Electronics and Targa Resources
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Targa is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Targa Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Targa Resources 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 Targa Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Targa Resources Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Targa Resources go up and down completely randomly.
Pair Corralation between Samsung Electronics and Targa Resources
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Targa Resources. In addition to that, Samsung Electronics is 1.05 times more volatile than Targa Resources Corp. It trades about -0.01 of its total potential returns per unit of risk. Targa Resources Corp is currently generating about 0.14 per unit of volatility. If you would invest 6,982 in Targa Resources Corp on September 4, 2024 and sell it today you would earn a total of 12,521 from holding Targa Resources Corp or generate 179.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 92.57% |
| Values | Daily Returns |
Samsung Electronics Co vs. Targa Resources Corp
Performance |
| Timeline |
| Samsung Electronics |
| Targa Resources Corp |
Samsung Electronics and Targa Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Targa Resources
The main advantage of trading using opposite Samsung Electronics and Targa Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Targa Resources 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 Targa Resources will offset losses from the drop in Targa Resources' 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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