Correlation Between Samsung Electronics and VOXX International
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and VOXX International 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 VOXX International 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 VOXX International, you can compare the effects of market volatilities on Samsung Electronics and VOXX International 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 VOXX International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and VOXX International.
Diversification Opportunities for Samsung Electronics and VOXX International
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and VOXX is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and VOXX International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VOXX International 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 VOXX International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VOXX International has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and VOXX International go up and down completely randomly.
Pair Corralation between Samsung Electronics and VOXX International
Assuming the 90 days horizon Samsung Electronics is expected to generate 78.48 times less return on investment than VOXX International. But when comparing it to its historical volatility, Samsung Electronics Co is 92.67 times less risky than VOXX International. It trades about 0.13 of its potential returns per unit of risk. VOXX International is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 372.00 in VOXX International on August 24, 2024 and sell it today you would earn a total of 402.00 from holding VOXX International or generate 108.06% 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. VOXX International
Performance |
| Timeline |
| Samsung Electronics |
| VOXX International |
Samsung Electronics and VOXX International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and VOXX International
The main advantage of trading using opposite Samsung Electronics and VOXX International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, VOXX International 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 VOXX International will offset losses from the drop in VOXX International'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 |
| VOXX International vs. LG Display Co | VOXX International vs. Vizio Holding Corp | VOXX International vs. Turtle Beach Corp | VOXX International vs. Emerson Radio |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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