Correlation Between Samsung Electronics and Vietnam Enterprise
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Vietnam Enterprise 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 Vietnam Enterprise 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 Vietnam Enterprise Investments, you can compare the effects of market volatilities on Samsung Electronics and Vietnam Enterprise 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 Vietnam Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Vietnam Enterprise.
Diversification Opportunities for Samsung Electronics and Vietnam Enterprise
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Vietnam is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Vietnam Enterprise Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Enterprise 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 Vietnam Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Enterprise has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Vietnam Enterprise go up and down completely randomly.
Pair Corralation between Samsung Electronics and Vietnam Enterprise
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 2.37 times more return on investment than Vietnam Enterprise. However, Samsung Electronics is 2.37 times more volatile than Vietnam Enterprise Investments. It trades about 0.02 of its potential returns per unit of risk. Vietnam Enterprise Investments is currently generating about -0.09 per unit of risk. If you would invest 90,450 in Samsung Electronics Co on November 3, 2024 and sell it today you would earn a total of 250.00 from holding Samsung Electronics Co or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Vietnam Enterprise Investments
Performance |
| Timeline |
| Samsung Electronics |
| Vietnam Enterprise |
Samsung Electronics and Vietnam Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Vietnam Enterprise
The main advantage of trading using opposite Samsung Electronics and Vietnam Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Vietnam Enterprise 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 Vietnam Enterprise will offset losses from the drop in Vietnam Enterprise'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 |
| Vietnam Enterprise vs. Southwest Airlines Co | Vietnam Enterprise vs. Hochschild Mining plc | Vietnam Enterprise vs. Alien Metals | Vietnam Enterprise vs. Morgan Advanced Materials |
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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