Correlation Between Samsung Electronics and Emerson Electric
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Emerson Electric 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 Emerson Electric 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 Emerson Electric Co, you can compare the effects of market volatilities on Samsung Electronics and Emerson Electric 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 Emerson Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Emerson Electric.
Diversification Opportunities for Samsung Electronics and Emerson Electric
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Emerson is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Emerson Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Electric 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 Emerson Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Electric has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Emerson Electric go up and down completely randomly.
Pair Corralation between Samsung Electronics and Emerson Electric
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Emerson Electric. In addition to that, Samsung Electronics is 1.11 times more volatile than Emerson Electric Co. It trades about -0.03 of its total potential returns per unit of risk. Emerson Electric Co is currently generating about 0.1 per unit of volatility. If you would invest 171,954 in Emerson Electric Co on November 8, 2024 and sell it today you would earn a total of 92,697 from holding Emerson Electric Co or generate 53.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Samsung Electronics Co vs. Emerson Electric Co
Performance |
| Timeline |
| Samsung Electronics |
| Emerson Electric |
Samsung Electronics and Emerson Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Emerson Electric
The main advantage of trading using opposite Samsung Electronics and Emerson Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Emerson Electric 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 Emerson Electric will offset losses from the drop in Emerson Electric's long position.| Samsung Electronics vs. Cognizant Technology Solutions | Samsung Electronics vs. Southwest Airlines | Samsung Electronics vs. Verizon Communications | Samsung Electronics vs. Martin Marietta Materials |
| Emerson Electric vs. Grupo Industrial Saltillo | Emerson Electric vs. Steel Dynamics | Emerson Electric vs. Micron Technology | Emerson Electric vs. Cognizant Technology Solutions |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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