Correlation Between Samsung Electronics and Sunrun
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sunrun 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 Sunrun 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 Sunrun Inc, you can compare the effects of market volatilities on Samsung Electronics and Sunrun 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 Sunrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sunrun.
Diversification Opportunities for Samsung Electronics and Sunrun
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Sunrun is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sunrun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunrun Inc 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 Sunrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunrun Inc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sunrun go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sunrun
Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.35 times more return on investment than Sunrun. However, Samsung Electronics Co is 2.83 times less risky than Sunrun. It trades about 0.0 of its potential returns per unit of risk. Sunrun Inc is currently generating about -0.01 per unit of risk. If you would invest 103,325 in Samsung Electronics Co on September 2, 2024 and sell it today you would lose (10,925) from holding Samsung Electronics Co or give up 10.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Sunrun Inc
Performance |
| Timeline |
| Samsung Electronics |
| Sunrun Inc |
Samsung Electronics and Sunrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Sunrun
The main advantage of trading using opposite Samsung Electronics and Sunrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sunrun 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 Sunrun will offset losses from the drop in Sunrun's long position.| Samsung Electronics vs. SLR Investment Corp | Samsung Electronics vs. APPLIED MATERIALS | Samsung Electronics vs. Mitsubishi Materials | Samsung Electronics vs. REGAL ASIAN INVESTMENTS |
| Sunrun vs. Xinyi Solar Holdings | Sunrun vs. Superior Plus Corp | Sunrun vs. NMI Holdings | Sunrun vs. Origin Agritech |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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