Correlation Between Samsung Electronics and Blue Star
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Blue Star 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 Blue Star 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 Blue Star Capital, you can compare the effects of market volatilities on Samsung Electronics and Blue Star 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 Blue Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Blue Star.
Diversification Opportunities for Samsung Electronics and Blue Star
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and Blue is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Blue Star Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Star Capital 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 Blue Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Star Capital has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Blue Star go up and down completely randomly.
Pair Corralation between Samsung Electronics and Blue Star
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 1659.31 times less return on investment than Blue Star. But when comparing it to its historical volatility, Samsung Electronics Co is 111.39 times less risky than Blue Star. It trades about 0.02 of its potential returns per unit of risk. Blue Star Capital is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 350.00 in Blue Star Capital on November 3, 2024 and sell it today you would earn a total of 475.00 from holding Blue Star Capital or generate 135.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Blue Star Capital
Performance |
| Timeline |
| Samsung Electronics |
| Blue Star Capital |
Samsung Electronics and Blue Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Blue Star
The main advantage of trading using opposite Samsung Electronics and Blue Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Blue Star 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 Blue Star will offset losses from the drop in Blue Star's long position.| Samsung Electronics vs. Aeorema Communications Plc | Samsung Electronics vs. Ryanair Holdings plc | Samsung Electronics vs. Gamma Communications PLC | Samsung Electronics vs. Norwegian Air Shuttle |
| Blue Star vs. Anglo Asian Mining | Blue Star vs. Canadian General Investments | Blue Star vs. Livermore Investments Group | Blue Star vs. New Residential Investment |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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