Correlation Between Samsung Electronics and Teradata Corp
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Teradata 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 Teradata 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 Teradata Corp, you can compare the effects of market volatilities on Samsung Electronics and Teradata 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 Teradata Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Teradata Corp.
Diversification Opportunities for Samsung Electronics and Teradata Corp
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Teradata is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Teradata Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradata 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 Teradata Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradata Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Teradata Corp go up and down completely randomly.
Pair Corralation between Samsung Electronics and Teradata Corp
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.72 times more return on investment than Teradata Corp. However, Samsung Electronics Co is 1.38 times less risky than Teradata Corp. It trades about -0.03 of its potential returns per unit of risk. Teradata Corp is currently generating about -0.04 per unit of risk. If you would invest 133,132 in Samsung Electronics Co on August 31, 2024 and sell it today you would lose (35,032) from holding Samsung Electronics Co or give up 26.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 87.83% |
| Values | Daily Returns |
Samsung Electronics Co vs. Teradata Corp
Performance |
| Timeline |
| Samsung Electronics |
| Teradata Corp |
Samsung Electronics and Teradata Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Teradata Corp
The main advantage of trading using opposite Samsung Electronics and Teradata Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Teradata 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 Teradata Corp will offset losses from the drop in Teradata Corp's long position.| Samsung Electronics vs. The Investment | Samsung Electronics vs. Kinnevik Investment AB | Samsung Electronics vs. The Mercantile Investment | Samsung Electronics vs. Smithson Investment Trust |
| Teradata Corp vs. Neometals | Teradata Corp vs. Coor Service Management | Teradata Corp vs. Aeorema Communications Plc | Teradata Corp vs. JLEN Environmental Assets |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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