Correlation Between Samsung Electronics and MCF Energy
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and MCF 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 MCF 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 MCF Energy, you can compare the effects of market volatilities on Samsung Electronics and MCF 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 MCF Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and MCF Energy.
Diversification Opportunities for Samsung Electronics and MCF Energy
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and MCF is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and MCF Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCF 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 MCF Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCF Energy has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and MCF Energy go up and down completely randomly.
Pair Corralation between Samsung Electronics and MCF Energy
Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.01 times more return on investment than MCF Energy. However, Samsung Electronics Co is 90.25 times less risky than MCF Energy. It trades about 0.09 of its potential returns per unit of risk. MCF Energy is currently generating about -0.07 per unit of risk. If you would invest 3,953 in Samsung Electronics Co on September 4, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. MCF Energy
Performance |
| Timeline |
| Samsung Electronics |
| MCF Energy |
Samsung Electronics and MCF Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and MCF Energy
The main advantage of trading using opposite Samsung Electronics and MCF Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, MCF 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 MCF Energy will offset losses from the drop in MCF Energy's long position.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Amazon Inc | Samsung Electronics vs. Alphabet Inc Class C |
| MCF Energy vs. Compania Cervecerias Unidas | MCF Energy vs. Diageo PLC ADR | MCF Energy vs. Insteel Industries | MCF Energy vs. BRC Inc |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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