Correlation Between Samsung Electronics and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Lundin Mining 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 Lundin Mining 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 Lundin Mining Corp, you can compare the effects of market volatilities on Samsung Electronics and Lundin Mining 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 Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Lundin Mining.
Diversification Opportunities for Samsung Electronics and Lundin Mining
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Lundin is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Lundin Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining 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 Lundin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Mining Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Lundin Mining go up and down completely randomly.
Pair Corralation between Samsung Electronics and Lundin Mining
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.84 times more return on investment than Lundin Mining. However, Samsung Electronics Co is 1.19 times less risky than Lundin Mining. It trades about 0.1 of its potential returns per unit of risk. Lundin Mining Corp is currently generating about 0.01 per unit of risk. If you would invest 90,450 in Samsung Electronics Co on October 29, 2024 and sell it today you would earn a total of 3,100 from holding Samsung Electronics Co or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Lundin Mining Corp
Performance |
| Timeline |
| Samsung Electronics |
| Lundin Mining Corp |
Samsung Electronics and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Lundin Mining
The main advantage of trading using opposite Samsung Electronics and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Lundin Mining 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 Lundin Mining will offset losses from the drop in Lundin Mining's long position.| Samsung Electronics vs. Lundin Mining Corp | Samsung Electronics vs. Impax Asset Management | Samsung Electronics vs. URU Metals | Samsung Electronics vs. Wyndham Hotels Resorts |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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