Correlation Between Samsung Electronics and Alfa SAB
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Alfa SAB 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 Alfa SAB 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 Alfa SAB de, you can compare the effects of market volatilities on Samsung Electronics and Alfa SAB 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 Alfa SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Alfa SAB.
Diversification Opportunities for Samsung Electronics and Alfa SAB
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Alfa is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Alfa SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa SAB de 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 Alfa SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa SAB de has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Alfa SAB go up and down completely randomly.
Pair Corralation between Samsung Electronics and Alfa SAB
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Alfa SAB. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.59 times less risky than Alfa SAB. The stock trades about -0.07 of its potential returns per unit of risk. The Alfa SAB de is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,491 in Alfa SAB de on September 18, 2024 and sell it today you would earn a total of 34.00 from holding Alfa SAB de or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Alfa SAB de
Performance |
| Timeline |
| Samsung Electronics |
| Alfa SAB de |
Samsung Electronics and Alfa SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Alfa SAB
The main advantage of trading using opposite Samsung Electronics and Alfa SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Alfa SAB 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 Alfa SAB will offset losses from the drop in Alfa SAB's long position.| Samsung Electronics vs. Amazon Inc | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tesla Inc | Samsung Electronics vs. Alphabet Inc Class A |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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