Correlation Between Samsung Electronics and Quaint Oak
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Quaint Oak 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 Quaint Oak 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 Quaint Oak Bancorp, you can compare the effects of market volatilities on Samsung Electronics and Quaint Oak 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 Quaint Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Quaint Oak.
Diversification Opportunities for Samsung Electronics and Quaint Oak
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Quaint is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Quaint Oak Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaint Oak Bancorp 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 Quaint Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaint Oak Bancorp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Quaint Oak go up and down completely randomly.
Pair Corralation between Samsung Electronics and Quaint Oak
Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.03 times more return on investment than Quaint Oak. However, Samsung Electronics Co is 29.41 times less risky than Quaint Oak. It trades about 0.11 of its potential returns per unit of risk. Quaint Oak Bancorp is currently generating about -0.02 per unit of risk. If you would invest 3,979 in Samsung Electronics Co on September 1, 2024 and sell it today you would earn a total of 81.00 from holding Samsung Electronics Co or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 77.7% |
| Values | Daily Returns |
Samsung Electronics Co vs. Quaint Oak Bancorp
Performance |
| Timeline |
| Samsung Electronics |
| Quaint Oak Bancorp |
Samsung Electronics and Quaint Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Quaint Oak
The main advantage of trading using opposite Samsung Electronics and Quaint Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Quaint Oak 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 Quaint Oak will offset losses from the drop in Quaint Oak's long position.| Samsung Electronics vs. Universal Electronics | Samsung Electronics vs. Vizio Holding Corp | Samsung Electronics vs. VOXX International | Samsung Electronics vs. Sony Group Corp |
| Quaint Oak vs. HUMANA INC | Quaint Oak vs. SCOR PK | Quaint Oak vs. Aquagold International | Quaint Oak vs. Thrivent High Yield |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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