Correlation Between Samsung Electronics and Argo Group
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Argo Group 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 Argo Group 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 Argo Group Limited, you can compare the effects of market volatilities on Samsung Electronics and Argo Group 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 Argo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Argo Group.
Diversification Opportunities for Samsung Electronics and Argo Group
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Samsung and Argo is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Argo Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Group Limited 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 Argo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Group Limited has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Argo Group go up and down completely randomly.
Pair Corralation between Samsung Electronics and Argo Group
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Argo Group. In addition to that, Samsung Electronics is 1.22 times more volatile than Argo Group Limited. It trades about -0.26 of its total potential returns per unit of risk. Argo Group Limited is currently generating about 0.22 per unit of volatility. If you would invest 375.00 in Argo Group Limited on September 25, 2024 and sell it today you would earn a total of 25.00 from holding Argo Group Limited or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Argo Group Limited
Performance |
| Timeline |
| Samsung Electronics |
| Argo Group Limited |
Samsung Electronics and Argo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Argo Group
The main advantage of trading using opposite Samsung Electronics and Argo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Argo Group 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 Argo Group will offset losses from the drop in Argo Group's long position.| Samsung Electronics vs. Impax Environmental Markets | Samsung Electronics vs. Zegona Communications Plc | Samsung Electronics vs. Gamma Communications PLC | Samsung Electronics vs. Spirent Communications plc |
| Argo Group vs. Samsung Electronics Co | Argo Group vs. Samsung Electronics Co | Argo Group vs. Hyundai Motor | Argo Group 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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