Correlation Between Samsung Electronics and Sitime
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sitime 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 Sitime 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 Sitime, you can compare the effects of market volatilities on Samsung Electronics and Sitime 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 Sitime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sitime.
Diversification Opportunities for Samsung Electronics and Sitime
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Sitime is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sitime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitime 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 Sitime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitime has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sitime go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sitime
Assuming the 90 days horizon Samsung Electronics is expected to generate 41.61 times less return on investment than Sitime. But when comparing it to its historical volatility, Samsung Electronics Co is 55.46 times less risky than Sitime. It trades about 0.11 of its potential returns per unit of risk. Sitime is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 11,062 in Sitime on August 27, 2024 and sell it today you would earn a total of 10,046 from holding Sitime or generate 90.82% 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. Sitime
Performance |
| Timeline |
| Samsung Electronics |
| Sitime |
Samsung Electronics and Sitime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Sitime
The main advantage of trading using opposite Samsung Electronics and Sitime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sitime 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 Sitime will offset losses from the drop in Sitime'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 |
| Sitime vs. Lattice Semiconductor | Sitime vs. Qorvo Inc | Sitime vs. Microchip Technology | Sitime vs. Silicon Laboratories |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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