Correlation Between Samsung Electronics and Axis Bank
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Axis Bank 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 Axis Bank 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 Axis Bank Ltd, you can compare the effects of market volatilities on Samsung Electronics and Axis Bank 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 Axis Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Axis Bank.
Diversification Opportunities for Samsung Electronics and Axis Bank
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and Axis is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Axis Bank Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axis Bank 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 Axis Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axis Bank has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Axis Bank go up and down completely randomly.
Pair Corralation between Samsung Electronics and Axis Bank
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.45 times more return on investment than Axis Bank. However, Samsung Electronics is 1.45 times more volatile than Axis Bank Ltd. It trades about 0.05 of its potential returns per unit of risk. Axis Bank Ltd is currently generating about -0.42 per unit of risk. If you would invest 91,200 in Samsung Electronics Co on October 20, 2024 and sell it today you would earn a total of 1,400 from holding Samsung Electronics Co or generate 1.54% 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. Axis Bank Ltd
Performance |
| Timeline |
| Samsung Electronics |
| Axis Bank |
Samsung Electronics and Axis Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Axis Bank
The main advantage of trading using opposite Samsung Electronics and Axis Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Axis Bank 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 Axis Bank will offset losses from the drop in Axis Bank's long position.| Samsung Electronics vs. Bellevue Healthcare Trust | Samsung Electronics vs. HCA Healthcare | Samsung Electronics vs. Optima Health plc | Samsung Electronics vs. MyHealthChecked Plc |
| Axis Bank vs. Dairy Farm International | Axis Bank vs. Tyson Foods Cl | Axis Bank vs. JD Sports Fashion | Axis Bank vs. Compagnie Plastic Omnium |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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