Correlation Between Samsung Electronics and Eiffage SA
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Eiffage SA 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 Eiffage SA 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 Eiffage SA ADR, you can compare the effects of market volatilities on Samsung Electronics and Eiffage SA 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 Eiffage SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Eiffage SA.
Diversification Opportunities for Samsung Electronics and Eiffage SA
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Eiffage is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Eiffage SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiffage SA ADR 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 Eiffage SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eiffage SA ADR has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Eiffage SA go up and down completely randomly.
Pair Corralation between Samsung Electronics and Eiffage SA
Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.04 times more return on investment than Eiffage SA. However, Samsung Electronics Co is 25.6 times less risky than Eiffage SA. It trades about 0.1 of its potential returns per unit of risk. Eiffage SA ADR is currently generating about -0.01 per unit of risk. If you would invest 3,953 in Samsung Electronics Co on September 12, 2024 and sell it today you would earn a total of 107.00 from holding Samsung Electronics Co or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.66% |
| Values | Daily Returns |
Samsung Electronics Co vs. Eiffage SA ADR
Performance |
| Timeline |
| Samsung Electronics |
| Eiffage SA ADR |
Samsung Electronics and Eiffage SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Eiffage SA
The main advantage of trading using opposite Samsung Electronics and Eiffage SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Eiffage SA 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 Eiffage SA will offset losses from the drop in Eiffage SA'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 |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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