Correlation Between Samsung Electronics and Coloplast
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Coloplast 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 Coloplast 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 Coloplast AS, you can compare the effects of market volatilities on Samsung Electronics and Coloplast 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 Coloplast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Coloplast.
Diversification Opportunities for Samsung Electronics and Coloplast
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and Coloplast is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Coloplast AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloplast AS 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 Coloplast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloplast AS has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Coloplast go up and down completely randomly.
Pair Corralation between Samsung Electronics and Coloplast
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Coloplast. In addition to that, Samsung Electronics is 1.24 times more volatile than Coloplast AS. It trades about -0.01 of its total potential returns per unit of risk. Coloplast AS is currently generating about 0.02 per unit of volatility. If you would invest 82,366 in Coloplast AS on September 5, 2024 and sell it today you would earn a total of 6,924 from holding Coloplast AS or generate 8.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Samsung Electronics Co vs. Coloplast AS
Performance |
| Timeline |
| Samsung Electronics |
| Coloplast AS |
Samsung Electronics and Coloplast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Coloplast
The main advantage of trading using opposite Samsung Electronics and Coloplast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Coloplast 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 Coloplast will offset losses from the drop in Coloplast'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 |
| Coloplast vs. Samsung Electronics Co | Coloplast vs. Samsung Electronics Co | Coloplast vs. Hyundai Motor | Coloplast 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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