Correlation Between Samsung Electronics and CGX Energy
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and CGX Energy 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 CGX Energy 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 CGX Energy, you can compare the effects of market volatilities on Samsung Electronics and CGX Energy 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 CGX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and CGX Energy.
Diversification Opportunities for Samsung Electronics and CGX Energy
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and CGX is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and CGX Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGX Energy 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 CGX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGX Energy has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and CGX Energy go up and down completely randomly.
Pair Corralation between Samsung Electronics and CGX Energy
Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.01 times more return on investment than CGX Energy. However, Samsung Electronics Co is 88.34 times less risky than CGX Energy. It trades about 0.13 of its potential returns per unit of risk. CGX Energy is currently generating about -0.02 per unit of risk. If you would invest 4,007 in Samsung Electronics Co on September 1, 2024 and sell it today you would earn a total of 53.00 from holding Samsung Electronics Co or generate 1.32% 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. CGX Energy
Performance |
| Timeline |
| Samsung Electronics |
| CGX Energy |
Samsung Electronics and CGX Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and CGX Energy
The main advantage of trading using opposite Samsung Electronics and CGX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, CGX Energy 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 CGX Energy will offset losses from the drop in CGX Energy'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 |
| CGX Energy vs. Avanti Energy | CGX Energy vs. Desert Mountain Energy | CGX Energy vs. Royal Helium | CGX Energy vs. Eco Oil Gas |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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