Correlation Between Samsung Electronics and Texas Rare
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Texas Rare 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 Texas Rare 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 Texas Rare Earth, you can compare the effects of market volatilities on Samsung Electronics and Texas Rare 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 Texas Rare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Texas Rare.
Diversification Opportunities for Samsung Electronics and Texas Rare
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Texas is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Texas Rare Earth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Texas Rare Earth 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 Texas Rare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Texas Rare Earth has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Texas Rare go up and down completely randomly.
Pair Corralation between Samsung Electronics and Texas Rare
Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.01 times more return on investment than Texas Rare. However, Samsung Electronics Co is 83.3 times less risky than Texas Rare. It trades about 0.1 of its potential returns per unit of risk. Texas Rare Earth is currently generating about -0.04 per unit of risk. If you would invest 3,925 in Samsung Electronics Co on August 29, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Texas Rare Earth
Performance |
| Timeline |
| Samsung Electronics |
| Texas Rare Earth |
Samsung Electronics and Texas Rare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Texas Rare
The main advantage of trading using opposite Samsung Electronics and Texas Rare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Texas Rare 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 Texas Rare will offset losses from the drop in Texas Rare's long position.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Alphabet Inc Class C | Samsung Electronics vs. Meta Platforms |
| Texas Rare vs. Ucore Rare Metals | Texas Rare vs. Lynas Rare Earths | Texas Rare vs. Arafura Resources | Texas Rare vs. Commerce Resources Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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