Correlation Between Samsung Electronics and Territorial Bancorp
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Territorial Bancorp 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 Territorial Bancorp 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 Territorial Bancorp, you can compare the effects of market volatilities on Samsung Electronics and Territorial Bancorp 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 Territorial Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Territorial Bancorp.
Diversification Opportunities for Samsung Electronics and Territorial Bancorp
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Territorial is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Territorial Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Territorial Bancorp 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 Territorial Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Territorial Bancorp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Territorial Bancorp go up and down completely randomly.
Pair Corralation between Samsung Electronics and Territorial Bancorp
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the Territorial Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.06 times less risky than Territorial Bancorp. The stock trades about -0.14 of its potential returns per unit of risk. The Territorial Bancorp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 939.00 in Territorial Bancorp on September 5, 2024 and sell it today you would earn a total of 61.00 from holding Territorial Bancorp or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Territorial Bancorp
Performance |
| Timeline |
| Samsung Electronics |
| Territorial Bancorp |
Samsung Electronics and Territorial Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Territorial Bancorp
The main advantage of trading using opposite Samsung Electronics and Territorial Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Territorial Bancorp 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 Territorial Bancorp will offset losses from the drop in Territorial Bancorp's long position.| Samsung Electronics vs. BlueScope Steel Limited | Samsung Electronics vs. Evolution Mining Limited | Samsung Electronics vs. Caltagirone SpA | Samsung Electronics vs. COSMOSTEEL HLDGS |
| Territorial Bancorp vs. Gamma Communications plc | Territorial Bancorp vs. Canon Marketing Japan | Territorial Bancorp vs. TRADEDOUBLER AB SK | Territorial Bancorp vs. Auto Trader Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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