Correlation Between Samsung Electronics and Auction Technology
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Auction Technology 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 Auction Technology 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 Auction Technology Group, you can compare the effects of market volatilities on Samsung Electronics and Auction Technology 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 Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Auction Technology.
Diversification Opportunities for Samsung Electronics and Auction Technology
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Auction is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology 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 Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Auction Technology go up and down completely randomly.
Pair Corralation between Samsung Electronics and Auction Technology
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Auction Technology. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.55 times less risky than Auction Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Auction Technology Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 69,300 in Auction Technology Group on November 19, 2024 and sell it today you would lose (10,600) from holding Auction Technology Group or give up 15.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Samsung Electronics Co vs. Auction Technology Group
Performance |
| Timeline |
| Samsung Electronics |
| Auction Technology |
Samsung Electronics and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Auction Technology
The main advantage of trading using opposite Samsung Electronics and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Auction Technology 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 Auction Technology will offset losses from the drop in Auction Technology's long position.| Samsung Electronics vs. Primary Health Properties | Samsung Electronics vs. Sartorius Stedim Biotech | Samsung Electronics vs. Check Point Software | Samsung Electronics vs. Bloomsbury Publishing Plc |
| Auction Technology vs. Eco Animal Health | Auction Technology vs. Abingdon Health Plc | Auction Technology vs. Omega Healthcare Investors | Auction Technology vs. Liontrust Asset Management |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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