Correlation Between Samsung Electronics and Tourmaline Oil
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Tourmaline Oil 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 Tourmaline Oil 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 Tourmaline Oil Corp, you can compare the effects of market volatilities on Samsung Electronics and Tourmaline Oil 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 Tourmaline Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Tourmaline Oil.
Diversification Opportunities for Samsung Electronics and Tourmaline Oil
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Tourmaline is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Tourmaline Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tourmaline Oil Corp 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 Tourmaline Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tourmaline Oil Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Tourmaline Oil go up and down completely randomly.
Pair Corralation between Samsung Electronics and Tourmaline Oil
Assuming the 90 days horizon Samsung Electronics is expected to generate 1.23 times less return on investment than Tourmaline Oil. But when comparing it to its historical volatility, Samsung Electronics Co is 20.63 times less risky than Tourmaline Oil. It trades about 0.13 of its potential returns per unit of risk. Tourmaline Oil Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,754 in Tourmaline Oil Corp on September 1, 2024 and sell it today you would lose (9.00) from holding Tourmaline Oil Corp or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Samsung Electronics Co vs. Tourmaline Oil Corp
Performance |
| Timeline |
| Samsung Electronics |
| Tourmaline Oil Corp |
Samsung Electronics and Tourmaline Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Tourmaline Oil
The main advantage of trading using opposite Samsung Electronics and Tourmaline Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Tourmaline Oil 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 Tourmaline Oil will offset losses from the drop in Tourmaline Oil'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 |
| Tourmaline Oil vs. Petroleo Brasileiro Petrobras | Tourmaline Oil vs. Equinor ASA ADR | Tourmaline Oil vs. Eni SpA ADR | Tourmaline Oil vs. YPF Sociedad Anonima |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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