Correlation Between Samsung Electronics and Promotora
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Promotora 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 Promotora 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 Promotora de Informaciones, you can compare the effects of market volatilities on Samsung Electronics and Promotora 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 Promotora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Promotora.
Diversification Opportunities for Samsung Electronics and Promotora
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Promotora is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Promotora de Informaciones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Promotora de Informa 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 Promotora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Promotora de Informa has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Promotora go up and down completely randomly.
Pair Corralation between Samsung Electronics and Promotora
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Promotora. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.35 times less risky than Promotora. The stock trades about -0.01 of its potential returns per unit of risk. The Promotora de Informaciones is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 30.00 in Promotora de Informaciones on September 13, 2024 and sell it today you would earn a total of 4.00 from holding Promotora de Informaciones or generate 13.33% 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. Promotora de Informaciones
Performance |
| Timeline |
| Samsung Electronics |
| Promotora de Informa |
Samsung Electronics and Promotora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Promotora
The main advantage of trading using opposite Samsung Electronics and Promotora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Promotora 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 Promotora will offset losses from the drop in Promotora's long position.| Samsung Electronics vs. Fidelity National Information | Samsung Electronics vs. Edita Food Industries | Samsung Electronics vs. Axfood AB | Samsung Electronics vs. Air Products Chemicals |
| Promotora vs. Hong Kong Land | Promotora vs. Neometals | Promotora vs. Coor Service Management | Promotora vs. Fidelity Sustainable USD |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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