Correlation Between Samsung Electronics and Pacific Financial
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Pacific Financial 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 Pacific Financial 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 Pacific Financial Corp, you can compare the effects of market volatilities on Samsung Electronics and Pacific Financial 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 Pacific Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Pacific Financial.
Diversification Opportunities for Samsung Electronics and Pacific Financial
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Pacific is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Pacific Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Financial Corp 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 Pacific Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Financial Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Pacific Financial go up and down completely randomly.
Pair Corralation between Samsung Electronics and Pacific Financial
If you would invest 1,180 in Pacific Financial Corp on August 31, 2024 and sell it today you would earn a total of 120.00 from holding Pacific Financial Corp or generate 10.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Pacific Financial Corp
Performance |
| Timeline |
| Samsung Electronics |
| Pacific Financial Corp |
Samsung Electronics and Pacific Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Pacific Financial
The main advantage of trading using opposite Samsung Electronics and Pacific Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Pacific Financial 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 Pacific Financial will offset losses from the drop in Pacific Financial's long position.| Samsung Electronics vs. Legacy Education | Samsung Electronics vs. Apple Inc | Samsung Electronics vs. NVIDIA | Samsung Electronics vs. Microsoft |
| Pacific Financial vs. Pioneer Bankcorp | Pacific Financial vs. Liberty Northwest Bancorp | Pacific Financial vs. First Community | Pacific Financial vs. Coeur dAlene Bancorp |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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