Correlation Between Samsung Electronics and Delta Air
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Delta Air 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 Delta Air 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 Delta Air Lines, you can compare the effects of market volatilities on Samsung Electronics and Delta Air 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 Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Delta Air.
Diversification Opportunities for Samsung Electronics and Delta Air
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Delta is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines 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 Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Delta Air go up and down completely randomly.
Pair Corralation between Samsung Electronics and Delta Air
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Delta Air. In addition to that, Samsung Electronics is 1.02 times more volatile than Delta Air Lines. It trades about -0.01 of its total potential returns per unit of risk. Delta Air Lines is currently generating about 0.16 per unit of volatility. If you would invest 55,400 in Delta Air Lines on August 24, 2024 and sell it today you would earn a total of 74,500 from holding Delta Air Lines or generate 134.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Delta Air Lines
Performance |
| Timeline |
| Samsung Electronics |
| Delta Air Lines |
Samsung Electronics and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Delta Air
The main advantage of trading using opposite Samsung Electronics and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Delta Air 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 Delta Air will offset losses from the drop in Delta Air's long position.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. The Select Sector | Samsung Electronics vs. Promotora y Operadora | Samsung Electronics vs. iShares Global Timber |
| Delta Air vs. Verizon Communications | Delta Air vs. GMxico Transportes SAB | Delta Air vs. Grupo Carso SAB | Delta Air vs. Southwest Airlines |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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