Correlation Between Samsung Electronics and G5 Entertainment
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and G5 Entertainment 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 G5 Entertainment 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 G5 Entertainment AB, you can compare the effects of market volatilities on Samsung Electronics and G5 Entertainment 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 G5 Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and G5 Entertainment.
Diversification Opportunities for Samsung Electronics and G5 Entertainment
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and 0QUS is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and G5 Entertainment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G5 Entertainment 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 G5 Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G5 Entertainment has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and G5 Entertainment go up and down completely randomly.
Pair Corralation between Samsung Electronics and G5 Entertainment
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.91 times more return on investment than G5 Entertainment. However, Samsung Electronics Co is 1.1 times less risky than G5 Entertainment. It trades about -0.03 of its potential returns per unit of risk. G5 Entertainment AB is currently generating about -0.04 per unit of risk. If you would invest 122,688 in Samsung Electronics Co on August 25, 2024 and sell it today you would lose (23,988) from holding Samsung Electronics Co or give up 19.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.53% |
| Values | Daily Returns |
Samsung Electronics Co vs. G5 Entertainment AB
Performance |
| Timeline |
| Samsung Electronics |
| G5 Entertainment |
Samsung Electronics and G5 Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and G5 Entertainment
The main advantage of trading using opposite Samsung Electronics and G5 Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, G5 Entertainment 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 G5 Entertainment will offset losses from the drop in G5 Entertainment'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 |
| G5 Entertainment vs. Samsung Electronics Co | G5 Entertainment vs. Samsung Electronics Co | G5 Entertainment vs. Hyundai Motor | G5 Entertainment 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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