Correlation Between Samsung Electronics and International Consolidated
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and International Consolidated 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 International Consolidated 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 International Consolidated Airlines, you can compare the effects of market volatilities on Samsung Electronics and International Consolidated 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 International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and International Consolidated.
Diversification Opportunities for Samsung Electronics and International Consolidated
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and International is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and International Consolidated go up and down completely randomly.
Pair Corralation between Samsung Electronics and International Consolidated
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the International Consolidated. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.0 times less risky than International Consolidated. The stock trades about -0.03 of its potential returns per unit of risk. The International Consolidated Airlines is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 15,644 in International Consolidated Airlines on August 31, 2024 and sell it today you would earn a total of 10,436 from holding International Consolidated Airlines or generate 66.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Samsung Electronics Co vs. International Consolidated Air
Performance |
| Timeline |
| Samsung Electronics |
| International Consolidated |
Samsung Electronics and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and International Consolidated
The main advantage of trading using opposite Samsung Electronics and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.| Samsung Electronics vs. The Investment | Samsung Electronics vs. Kinnevik Investment AB | Samsung Electronics vs. The Mercantile Investment | Samsung Electronics vs. Smithson Investment Trust |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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