Correlation Between Samsung Electronics and RMG Acquisition
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and RMG Acquisition 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 RMG Acquisition 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 RMG Acquisition Corp, you can compare the effects of market volatilities on Samsung Electronics and RMG Acquisition 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 RMG Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and RMG Acquisition.
Diversification Opportunities for Samsung Electronics and RMG Acquisition
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and RMG is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and RMG Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RMG Acquisition 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 RMG Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RMG Acquisition Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and RMG Acquisition go up and down completely randomly.
Pair Corralation between Samsung Electronics and RMG Acquisition
Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.1 times more return on investment than RMG Acquisition. However, Samsung Electronics Co is 10.05 times less risky than RMG Acquisition. It trades about 0.1 of its potential returns per unit of risk. RMG Acquisition Corp is currently generating about -0.01 per unit of risk. If you would invest 3,925 in Samsung Electronics Co on September 3, 2024 and sell it today you would earn a total of 135.00 from holding Samsung Electronics Co or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 71.31% |
| Values | Daily Returns |
Samsung Electronics Co vs. RMG Acquisition Corp
Performance |
| Timeline |
| Samsung Electronics |
| RMG Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Samsung Electronics and RMG Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and RMG Acquisition
The main advantage of trading using opposite Samsung Electronics and RMG Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, RMG Acquisition 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 RMG Acquisition will offset losses from the drop in RMG Acquisition's long position.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Amazon Inc | Samsung Electronics vs. Alphabet Inc Class C |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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