Correlation Between Samsung Electronics and First Republic
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and First Republic 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 First Republic 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 First Republic Bank, you can compare the effects of market volatilities on Samsung Electronics and First Republic 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 First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and First Republic.
Diversification Opportunities for Samsung Electronics and First Republic
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and First Republic go up and down completely randomly.
Pair Corralation between Samsung Electronics and First Republic
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.35 times more return on investment than First Republic. However, Samsung Electronics Co is 2.89 times less risky than First Republic. It trades about 0.0 of its potential returns per unit of risk. First Republic Bank is currently generating about -0.08 per unit of risk. If you would invest 2,116,443 in Samsung Electronics Co on August 25, 2024 and sell it today you would lose (123,937) from holding Samsung Electronics Co or give up 5.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. First Republic Bank
Performance |
| Timeline |
| Samsung Electronics |
| First Republic Bank |
Samsung Electronics and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and First Republic
The main advantage of trading using opposite Samsung Electronics and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.| Samsung Electronics vs. Monster Beverage Corp | Samsung Electronics vs. DXC Technology | Samsung Electronics vs. Deutsche Bank Aktiengesellschaft | Samsung Electronics 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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