Correlation Between Samsung Electronics and Telenor ASA
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Telenor ASA 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 Telenor ASA 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 Telenor ASA ADR, you can compare the effects of market volatilities on Samsung Electronics and Telenor ASA 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 Telenor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Telenor ASA.
Diversification Opportunities for Samsung Electronics and Telenor ASA
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Telenor is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Telenor ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telenor ASA ADR 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 Telenor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telenor ASA ADR has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Telenor ASA go up and down completely randomly.
Pair Corralation between Samsung Electronics and Telenor ASA
If you would invest 1,189 in Telenor ASA ADR on August 29, 2024 and sell it today you would lose (3.00) from holding Telenor ASA ADR or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. Telenor ASA ADR
Performance |
| Timeline |
| Samsung Electronics |
| Telenor ASA ADR |
Samsung Electronics and Telenor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Telenor ASA
The main advantage of trading using opposite Samsung Electronics and Telenor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Telenor ASA 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 Telenor ASA will offset losses from the drop in Telenor ASA's long position.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Alphabet Inc Class C | Samsung Electronics vs. Meta Platforms |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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