Correlation Between Samsung Electronics and Ariana Resources
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Ariana Resources 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 Ariana Resources 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 Ariana Resources plc, you can compare the effects of market volatilities on Samsung Electronics and Ariana Resources 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 Ariana Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Ariana Resources.
Diversification Opportunities for Samsung Electronics and Ariana Resources
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Ariana is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Ariana Resources plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ariana Resources plc 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 Ariana Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ariana Resources plc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Ariana Resources go up and down completely randomly.
Pair Corralation between Samsung Electronics and Ariana Resources
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.9 times more return on investment than Ariana Resources. However, Samsung Electronics Co is 1.11 times less risky than Ariana Resources. It trades about -0.1 of its potential returns per unit of risk. Ariana Resources plc is currently generating about -0.12 per unit of risk. If you would invest 106,800 in Samsung Electronics Co on September 2, 2024 and sell it today you would lose (8,700) from holding Samsung Electronics Co or give up 8.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Ariana Resources plc
Performance |
| Timeline |
| Samsung Electronics |
| Ariana Resources plc |
Samsung Electronics and Ariana Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Ariana Resources
The main advantage of trading using opposite Samsung Electronics and Ariana Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Ariana Resources 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 Ariana Resources will offset losses from the drop in Ariana Resources' long position.| Samsung Electronics vs. Cizzle Biotechnology Holdings | Samsung Electronics vs. International Biotechnology Trust | Samsung Electronics vs. TechnipFMC PLC | Samsung Electronics vs. Intuitive Investments Group |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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