Correlation Between Samsung Electronics and Cathay Pacific
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Cathay Pacific 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 Cathay Pacific 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 Cathay Pacific Airways, you can compare the effects of market volatilities on Samsung Electronics and Cathay Pacific 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 Cathay Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Cathay Pacific.
Diversification Opportunities for Samsung Electronics and Cathay Pacific
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Cathay is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Cathay Pacific Airways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Pacific Airways 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 Cathay Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Pacific Airways has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Cathay Pacific go up and down completely randomly.
Pair Corralation between Samsung Electronics and Cathay Pacific
If you would invest 91.00 in Cathay Pacific Airways on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Cathay Pacific Airways or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Samsung Electronics Co vs. Cathay Pacific Airways
Performance |
| Timeline |
| Samsung Electronics |
| Cathay Pacific Airways |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Samsung Electronics and Cathay Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Cathay Pacific
The main advantage of trading using opposite Samsung Electronics and Cathay Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Cathay Pacific 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 Cathay Pacific will offset losses from the drop in Cathay Pacific's long position.| Samsung Electronics vs. Copa Holdings SA | Samsung Electronics vs. United Airlines Holdings | Samsung Electronics vs. Delta Air Lines | Samsung Electronics vs. SkyWest |
| Cathay Pacific vs. Finnair Oyj | Cathay Pacific vs. easyJet plc | Cathay Pacific vs. Norse Atlantic ASA | Cathay Pacific vs. Air New Zealand |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |