Correlation Between Samsung Electronics and Metso Outotec
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Metso Outotec 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 Metso Outotec 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 Metso Outotec Corp, you can compare the effects of market volatilities on Samsung Electronics and Metso Outotec 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 Metso Outotec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Metso Outotec.
Diversification Opportunities for Samsung Electronics and Metso Outotec
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and Metso is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Metso Outotec Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metso Outotec 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 Metso Outotec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metso Outotec Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Metso Outotec go up and down completely randomly.
Pair Corralation between Samsung Electronics and Metso Outotec
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Metso Outotec. In addition to that, Samsung Electronics is 1.18 times more volatile than Metso Outotec Corp. It trades about -0.13 of its total potential returns per unit of risk. Metso Outotec Corp is currently generating about -0.08 per unit of volatility. If you would invest 1,067 in Metso Outotec Corp on September 5, 2024 and sell it today you would lose (215.00) from holding Metso Outotec Corp or give up 20.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Metso Outotec Corp
Performance |
| Timeline |
| Samsung Electronics |
| Metso Outotec Corp |
Samsung Electronics and Metso Outotec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Metso Outotec
The main advantage of trading using opposite Samsung Electronics and Metso Outotec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Metso Outotec 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 Metso Outotec will offset losses from the drop in Metso Outotec's long position.| Samsung Electronics vs. Ashtead Technology Holdings | Samsung Electronics vs. Invesco Physical Silver | Samsung Electronics vs. Pfeiffer Vacuum Technology | Samsung Electronics vs. Caledonia Mining |
| Metso Outotec vs. Samsung Electronics Co | Metso Outotec vs. Samsung Electronics Co | Metso Outotec vs. Hyundai Motor | Metso Outotec vs. Toyota Motor Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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