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
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Delta is -0.73. 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. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.29 times less risky than Delta Air. The stock trades about -0.18 of its potential returns per unit of risk. The Delta Air Lines is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 83,551 in Delta Air Lines on November 2, 2024 and sell it today you would earn a total of 57,849 from holding Delta Air Lines or generate 69.24% 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. 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. KB Home | Samsung Electronics vs. First Majestic Silver | Samsung Electronics vs. Desarrolladora Homex SAB | Samsung Electronics vs. Verizon Communications |
| Delta Air vs. DXC Technology | Delta Air vs. UnitedHealth Group Incorporated | Delta Air vs. Verizon Communications | Delta Air vs. New Oriental Education |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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