Correlation Between Samsung Electronics and Aeon Co
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Aeon Co 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 Aeon Co 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 Aeon Co Ltd, you can compare the effects of market volatilities on Samsung Electronics and Aeon Co 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 Aeon Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Aeon Co.
Diversification Opportunities for Samsung Electronics and Aeon Co
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Aeon is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Aeon Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon Co 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 Aeon Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon Co has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Aeon Co go up and down completely randomly.
Pair Corralation between Samsung Electronics and Aeon Co
Assuming the 90 days horizon Samsung Electronics is expected to generate 5.01 times less return on investment than Aeon Co. But when comparing it to its historical volatility, Samsung Electronics Co is 20.96 times less risky than Aeon Co. It trades about 0.1 of its potential returns per unit of risk. Aeon Co Ltd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,075 in Aeon Co Ltd on August 23, 2024 and sell it today you would earn a total of 262.00 from holding Aeon Co Ltd or generate 12.63% 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. Aeon Co Ltd
Performance |
| Timeline |
| Samsung Electronics |
| Aeon Co |
Samsung Electronics and Aeon Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Aeon Co
The main advantage of trading using opposite Samsung Electronics and Aeon Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Aeon Co 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 Aeon Co will offset losses from the drop in Aeon Co's long position.| Samsung Electronics vs. Universal Electronics | Samsung Electronics vs. Vizio Holding Corp | Samsung Electronics vs. VOXX International | Samsung Electronics vs. Sony Group 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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