Correlation Between Samsung Electronics and OTP Bank
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and OTP Bank 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 OTP Bank 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 OTP Bank Nyrt, you can compare the effects of market volatilities on Samsung Electronics and OTP Bank 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 OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and OTP Bank.
Diversification Opportunities for Samsung Electronics and OTP Bank
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and OTP is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and OTP Bank Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OTP Bank Nyrt 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 OTP Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OTP Bank Nyrt has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and OTP Bank go up and down completely randomly.
Pair Corralation between Samsung Electronics and OTP Bank
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the OTP Bank. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 7.05 times less risky than OTP Bank. The stock trades about -0.08 of its potential returns per unit of risk. The OTP Bank Nyrt is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,259,000 in OTP Bank Nyrt on August 30, 2024 and sell it today you would earn a total of 0.00 from holding OTP Bank Nyrt or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. OTP Bank Nyrt
Performance |
| Timeline |
| Samsung Electronics |
| OTP Bank Nyrt |
Samsung Electronics and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and OTP Bank
The main advantage of trading using opposite Samsung Electronics and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, OTP Bank 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 OTP Bank will offset losses from the drop in OTP Bank's long position.| Samsung Electronics vs. Lundin Mining Corp | Samsung Electronics vs. Metals Exploration Plc | Samsung Electronics vs. Check Point Software | Samsung Electronics vs. GreenX Metals |
| OTP Bank vs. Lendinvest PLC | OTP Bank vs. Neometals | OTP Bank vs. Albion Technology General | OTP Bank vs. Jupiter Fund Management |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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