Correlation Between Samsung Electronics and Learning Technologies
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Learning Technologies 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 Learning Technologies 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 Learning Technologies Group, you can compare the effects of market volatilities on Samsung Electronics and Learning Technologies 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 Learning Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Learning Technologies.
Diversification Opportunities for Samsung Electronics and Learning Technologies
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Learning is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Learning Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Learning Technologies 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 Learning Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Learning Technologies has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Learning Technologies go up and down completely randomly.
Pair Corralation between Samsung Electronics and Learning Technologies
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 9.44 times more return on investment than Learning Technologies. However, Samsung Electronics is 9.44 times more volatile than Learning Technologies Group. It trades about 0.05 of its potential returns per unit of risk. Learning Technologies Group is currently generating about -0.21 per unit of risk. If you would invest 94,900 in Samsung Electronics Co on October 12, 2024 and sell it today you would earn a total of 1,450 from holding Samsung Electronics Co or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Learning Technologies Group
Performance |
| Timeline |
| Samsung Electronics |
| Learning Technologies |
Samsung Electronics and Learning Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Learning Technologies
The main advantage of trading using opposite Samsung Electronics and Learning Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Learning Technologies 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 Learning Technologies will offset losses from the drop in Learning Technologies' long position.| Samsung Electronics vs. Young Cos Brewery | Samsung Electronics vs. Porvair plc | Samsung Electronics vs. Molson Coors Beverage | Samsung Electronics vs. Westlake Chemical Corp |
| Learning Technologies vs. Spire Healthcare Group | Learning Technologies vs. Universal Health Services | Learning Technologies vs. Worldwide Healthcare Trust | Learning Technologies vs. Optima Health plc |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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