Correlation Between Samsung Electronics and Teradyne
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Teradyne 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 Teradyne 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 Teradyne, you can compare the effects of market volatilities on Samsung Electronics and Teradyne 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 Teradyne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Teradyne.
Diversification Opportunities for Samsung Electronics and Teradyne
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Teradyne is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Teradyne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradyne 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 Teradyne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradyne has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Teradyne go up and down completely randomly.
Pair Corralation between Samsung Electronics and Teradyne
Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.03 times more return on investment than Teradyne. However, Samsung Electronics Co is 30.2 times less risky than Teradyne. It trades about 0.13 of its potential returns per unit of risk. Teradyne is currently generating about -0.07 per unit of risk. If you would invest 4,033 in Samsung Electronics Co on August 31, 2024 and sell it today you would earn a total of 27.00 from holding Samsung Electronics Co or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Teradyne
Performance |
| Timeline |
| Samsung Electronics |
| Teradyne |
Samsung Electronics and Teradyne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Teradyne
The main advantage of trading using opposite Samsung Electronics and Teradyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Teradyne 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 Teradyne will offset losses from the drop in Teradyne's long position.| Samsung Electronics vs. Legacy Education | Samsung Electronics vs. Apple Inc | Samsung Electronics vs. NVIDIA | Samsung Electronics vs. Microsoft |
| Teradyne vs. IPG Photonics | Teradyne vs. Ultra Clean Holdings | Teradyne vs. Onto Innovation | Teradyne vs. Cohu Inc |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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