Correlation Between Samsung Electronics and Bank Central
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Bank Central 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 Bank Central 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 Bank Central Asia, you can compare the effects of market volatilities on Samsung Electronics and Bank Central 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 Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Bank Central.
Diversification Opportunities for Samsung Electronics and Bank Central
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Bank is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Bank Central Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Central Asia 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 Bank Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Central Asia has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Bank Central go up and down completely randomly.
Pair Corralation between Samsung Electronics and Bank Central
Assuming the 90 days horizon Samsung Electronics is expected to generate 9.24 times less return on investment than Bank Central. But when comparing it to its historical volatility, Samsung Electronics Co is 18.37 times less risky than Bank Central. It trades about 0.13 of its potential returns per unit of risk. Bank Central Asia is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,423 in Bank Central Asia on August 29, 2024 and sell it today you would earn a total of 162.00 from holding Bank Central Asia or generate 11.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Bank Central Asia
Performance |
| Timeline |
| Samsung Electronics |
| Bank Central Asia |
Samsung Electronics and Bank Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Bank Central
The main advantage of trading using opposite Samsung Electronics and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Bank Central 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 Bank Central will offset losses from the drop in Bank Central's long position.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Alphabet Inc Class C | Samsung Electronics vs. Meta Platforms |
| Bank Central vs. Israel Discount Bank | Bank Central vs. Baraboo Bancorporation | Bank Central vs. Danske Bank AS | Bank Central vs. Jyske Bank AS |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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