Correlation Between Samsung Electronics and MTI Wireless
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and MTI Wireless 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 MTI Wireless 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 MTI Wireless Edge, you can compare the effects of market volatilities on Samsung Electronics and MTI Wireless 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 MTI Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and MTI Wireless.
Diversification Opportunities for Samsung Electronics and MTI Wireless
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Samsung and MTI is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and MTI Wireless Edge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI Wireless Edge 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 MTI Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI Wireless Edge has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and MTI Wireless go up and down completely randomly.
Pair Corralation between Samsung Electronics and MTI Wireless
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the MTI Wireless. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.24 times less risky than MTI Wireless. The stock trades about -0.01 of its potential returns per unit of risk. The MTI Wireless Edge is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,731 in MTI Wireless Edge on November 27, 2024 and sell it today you would earn a total of 769.00 from holding MTI Wireless Edge or generate 16.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.37% |
| Values | Daily Returns |
Samsung Electronics Co vs. MTI Wireless Edge
Performance |
| Timeline |
| Samsung Electronics |
| MTI Wireless Edge |
Samsung Electronics and MTI Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and MTI Wireless
The main advantage of trading using opposite Samsung Electronics and MTI Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, MTI Wireless 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 MTI Wireless will offset losses from the drop in MTI Wireless' long position.| Samsung Electronics vs. BE Semiconductor Industries | Samsung Electronics vs. Ecclesiastical Insurance Office | Samsung Electronics vs. Nordic Semiconductor ASA | Samsung Electronics vs. MTI Wireless Edge |
| MTI Wireless vs. Wyndham Hotels Resorts | MTI Wireless vs. Bloomsbury Publishing Plc | MTI Wireless vs. Fulcrum Metals PLC | MTI Wireless vs. AMG Advanced Metallurgical |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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