Correlation Between Samsung Electronics and Gold Reserve
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Gold Reserve 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 Gold Reserve 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 Gold Reserve, you can compare the effects of market volatilities on Samsung Electronics and Gold Reserve 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 Gold Reserve. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Gold Reserve.
Diversification Opportunities for Samsung Electronics and Gold Reserve
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Gold is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Gold Reserve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Reserve 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 Gold Reserve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Reserve has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Gold Reserve go up and down completely randomly.
Pair Corralation between Samsung Electronics and Gold Reserve
Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.01 times more return on investment than Gold Reserve. However, Samsung Electronics Co is 79.73 times less risky than Gold Reserve. It trades about 0.13 of its potential returns per unit of risk. Gold Reserve is currently generating about -0.07 per unit of risk. If you would invest 4,007 in Samsung Electronics Co on August 29, 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 Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Gold Reserve
Performance |
| Timeline |
| Samsung Electronics |
| Gold Reserve |
Samsung Electronics and Gold Reserve Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Gold Reserve
The main advantage of trading using opposite Samsung Electronics and Gold Reserve positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Gold Reserve 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 Gold Reserve will offset losses from the drop in Gold Reserve's long position.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Alphabet Inc Class C | Samsung Electronics vs. Meta Platforms |
| Gold Reserve vs. Monarch Mining | Gold Reserve vs. Lundin Gold | Gold Reserve vs. Liberty Gold Corp | Gold Reserve vs. Minera Alamos |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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