Correlation Between Samsung Electronics and Renewal Fuels
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Renewal Fuels 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 Renewal Fuels 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 Renewal Fuels, you can compare the effects of market volatilities on Samsung Electronics and Renewal Fuels 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 Renewal Fuels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Renewal Fuels.
Diversification Opportunities for Samsung Electronics and Renewal Fuels
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Renewal is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Renewal Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renewal Fuels 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 Renewal Fuels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renewal Fuels has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Renewal Fuels go up and down completely randomly.
Pair Corralation between Samsung Electronics and Renewal Fuels
Assuming the 90 days horizon Samsung Electronics is expected to generate 129.75 times less return on investment than Renewal Fuels. But when comparing it to its historical volatility, Samsung Electronics Co is 487.05 times less risky than Renewal Fuels. It trades about 0.15 of its potential returns per unit of risk. Renewal Fuels is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.04 in Renewal Fuels on November 29, 2024 and sell it today you would lose (0.03) from holding Renewal Fuels or give up 75.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Samsung Electronics Co vs. Renewal Fuels
Performance |
| Timeline |
| Samsung Electronics |
| Renewal Fuels |
Samsung Electronics and Renewal Fuels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Renewal Fuels
The main advantage of trading using opposite Samsung Electronics and Renewal Fuels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Renewal Fuels 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 Renewal Fuels will offset losses from the drop in Renewal Fuels' long position.| Samsung Electronics vs. Pfizer Inc | Samsung Electronics vs. American Express | Samsung Electronics vs. Alcoa Corp | Samsung Electronics vs. Cisco Systems |
| Renewal Fuels vs. C Bond Systems | Renewal Fuels vs. Lhyfe SA | Renewal Fuels vs. Industrial Nanotech | Renewal Fuels vs. CN Energy Group |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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