Correlation Between Samsung Electronics and Singing Machine
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Singing Machine 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 Singing Machine 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 The Singing Machine, you can compare the effects of market volatilities on Samsung Electronics and Singing Machine 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 Singing Machine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Singing Machine.
Diversification Opportunities for Samsung Electronics and Singing Machine
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and Singing is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and The Singing Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singing Machine 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 Singing Machine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singing Machine has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Singing Machine go up and down completely randomly.
Pair Corralation between Samsung Electronics and Singing Machine
Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.01 times more return on investment than Singing Machine. However, Samsung Electronics Co is 107.54 times less risky than Singing Machine. It trades about 0.13 of its potential returns per unit of risk. The Singing Machine is currently generating about -0.12 per unit of risk. If you would invest 4,033 in Samsung Electronics Co on August 30, 2024 and sell it today you would earn a total of 27.00 from holding Samsung Electronics Co or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 79.69% |
| Values | Daily Returns |
Samsung Electronics Co vs. The Singing Machine
Performance |
| Timeline |
| Samsung Electronics |
| Singing Machine |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Samsung Electronics and Singing Machine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Singing Machine
The main advantage of trading using opposite Samsung Electronics and Singing Machine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Singing Machine 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 Singing Machine will offset losses from the drop in Singing Machine's long position.| Samsung Electronics vs. Legacy Education | Samsung Electronics vs. Apple Inc | Samsung Electronics vs. NVIDIA | Samsung Electronics vs. Microsoft |
| Singing Machine vs. Koss Corporation | Singing Machine vs. Emerson Radio | Singing Machine vs. Wearable Devices | Singing Machine vs. Zepp Health Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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