Correlation Between Samsung Electronics and Sempra
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sempra 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 Sempra 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 Sempra, you can compare the effects of market volatilities on Samsung Electronics and Sempra 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 Sempra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sempra.
Diversification Opportunities for Samsung Electronics and Sempra
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Sempra is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sempra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sempra 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 Sempra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sempra has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sempra go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sempra
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Sempra. In addition to that, Samsung Electronics is 1.5 times more volatile than Sempra. It trades about -0.03 of its total potential returns per unit of risk. Sempra is currently generating about 0.2 per unit of volatility. If you would invest 129,424 in Sempra on September 2, 2024 and sell it today you would earn a total of 60,326 from holding Sempra or generate 46.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Samsung Electronics Co vs. Sempra
Performance |
| Timeline |
| Samsung Electronics |
| Sempra |
Samsung Electronics and Sempra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Sempra
The main advantage of trading using opposite Samsung Electronics and Sempra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sempra 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 Sempra will offset losses from the drop in Sempra's long position.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Netflix | Samsung Electronics vs. Monster Beverage Corp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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