Correlation Between Samsung Electronics and Oak Ridge
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Oak Ridge 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 Oak Ridge 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 Oak Ridge Financial, you can compare the effects of market volatilities on Samsung Electronics and Oak Ridge 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 Oak Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Oak Ridge.
Diversification Opportunities for Samsung Electronics and Oak Ridge
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Oak is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Oak Ridge Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Ridge Financial 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 Oak Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Ridge Financial has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Oak Ridge go up and down completely randomly.
Pair Corralation between Samsung Electronics and Oak Ridge
If you would invest 1,917 in Oak Ridge Financial on August 29, 2024 and sell it today you would earn a total of 143.00 from holding Oak Ridge Financial or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Oak Ridge Financial
Performance |
| Timeline |
| Samsung Electronics |
| Oak Ridge Financial |
Samsung Electronics and Oak Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Oak Ridge
The main advantage of trading using opposite Samsung Electronics and Oak Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Oak Ridge 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 Oak Ridge will offset losses from the drop in Oak Ridge's long position.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Alphabet Inc Class C | Samsung Electronics vs. Meta Platforms |
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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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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