Correlation Between Samsung Electronics and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Prosiebensat 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 Prosiebensat 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 Prosiebensat 1 Media, you can compare the effects of market volatilities on Samsung Electronics and Prosiebensat 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 Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Prosiebensat.
Diversification Opportunities for Samsung Electronics and Prosiebensat
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samsung and Prosiebensat is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Prosiebensat 1 Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosiebensat 1 Media 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 Prosiebensat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosiebensat 1 Media has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Prosiebensat go up and down completely randomly.
Pair Corralation between Samsung Electronics and Prosiebensat
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Prosiebensat. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.13 times less risky than Prosiebensat. The stock trades about -0.07 of its potential returns per unit of risk. The Prosiebensat 1 Media is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 613.00 in Prosiebensat 1 Media on August 25, 2024 and sell it today you would lose (139.00) from holding Prosiebensat 1 Media or give up 22.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Prosiebensat 1 Media
Performance |
| Timeline |
| Samsung Electronics |
| Prosiebensat 1 Media |
Samsung Electronics and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Prosiebensat
The main advantage of trading using opposite Samsung Electronics and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Prosiebensat 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 Prosiebensat will offset losses from the drop in Prosiebensat's long position.| Samsung Electronics vs. Aeorema Communications Plc | Samsung Electronics vs. Silvercorp Metals | Samsung Electronics vs. Greenroc Mining PLC | Samsung Electronics vs. Verizon Communications |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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