Correlation Between Samsung Electronics and Bank of Georgia
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Bank of Georgia 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 Bank of Georgia 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 Bank of Georgia, you can compare the effects of market volatilities on Samsung Electronics and Bank of Georgia 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 Bank of Georgia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Bank of Georgia.
Diversification Opportunities for Samsung Electronics and Bank of Georgia
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Bank is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Bank of Georgia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Georgia 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 Bank of Georgia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Georgia has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Bank of Georgia go up and down completely randomly.
Pair Corralation between Samsung Electronics and Bank of Georgia
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Bank of Georgia. In addition to that, Samsung Electronics is 1.09 times more volatile than Bank of Georgia. It trades about -0.14 of its total potential returns per unit of risk. Bank of Georgia is currently generating about 0.14 per unit of volatility. If you would invest 394,571 in Bank of Georgia on September 19, 2024 and sell it today you would earn a total of 80,429 from holding Bank of Georgia or generate 20.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Bank of Georgia
Performance |
| Timeline |
| Samsung Electronics |
| Bank of Georgia |
Samsung Electronics and Bank of Georgia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Bank of Georgia
The main advantage of trading using opposite Samsung Electronics and Bank of Georgia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Bank of Georgia 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 Bank of Georgia will offset losses from the drop in Bank of Georgia's long position.| Samsung Electronics vs. Rockfire Resources plc | Samsung Electronics vs. Tlou Energy | Samsung Electronics vs. Ikigai Ventures | Samsung Electronics vs. Falcon Oil Gas |
| Bank of Georgia vs. Samsung Electronics Co | Bank of Georgia vs. Samsung Electronics Co | Bank of Georgia vs. Hyundai Motor | Bank of Georgia 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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