Correlation Between Samsung Electronics and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Southern Copper 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 Southern Copper 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 Southern Copper, you can compare the effects of market volatilities on Samsung Electronics and Southern Copper 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 Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Southern Copper.
Diversification Opportunities for Samsung Electronics and Southern Copper
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Southern is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Southern Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper 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 Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Southern Copper go up and down completely randomly.
Pair Corralation between Samsung Electronics and Southern Copper
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Southern Copper. In addition to that, Samsung Electronics is 1.21 times more volatile than Southern Copper. It trades about -0.2 of its total potential returns per unit of risk. Southern Copper is currently generating about 0.05 per unit of volatility. If you would invest 199,641 in Southern Copper on August 31, 2024 and sell it today you would earn a total of 10,549 from holding Southern Copper or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Southern Copper
Performance |
| Timeline |
| Samsung Electronics |
| Southern Copper |
Samsung Electronics and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Southern Copper
The main advantage of trading using opposite Samsung Electronics and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| Samsung Electronics vs. Taiwan Semiconductor Manufacturing | Samsung Electronics vs. Martin Marietta Materials | Samsung Electronics vs. The Bank of | Samsung Electronics vs. First Republic Bank |
| Southern Copper vs. Deutsche Bank Aktiengesellschaft | Southern Copper vs. FIBRA Storage | Southern Copper vs. McEwen Mining | Southern Copper vs. Ross Stores |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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