Correlation Between Samsung Electronics and AGCO
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and AGCO 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 AGCO 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 AGCO Corporation, you can compare the effects of market volatilities on Samsung Electronics and AGCO 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 AGCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and AGCO.
Diversification Opportunities for Samsung Electronics and AGCO
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and AGCO is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and AGCO Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGCO 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 AGCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGCO has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and AGCO go up and down completely randomly.
Pair Corralation between Samsung Electronics and AGCO
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the AGCO. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.07 times less risky than AGCO. The stock trades about -0.07 of its potential returns per unit of risk. The AGCO Corporation is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9,128 in AGCO Corporation on September 1, 2024 and sell it today you would earn a total of 420.00 from holding AGCO Corporation or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. AGCO Corp.
Performance |
| Timeline |
| Samsung Electronics |
| AGCO |
Samsung Electronics and AGCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and AGCO
The main advantage of trading using opposite Samsung Electronics and AGCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, AGCO 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 AGCO will offset losses from the drop in AGCO's long position.| Samsung Electronics vs. QINGCI GAMES INC | Samsung Electronics vs. GAMESTOP | Samsung Electronics vs. CI GAMES SA | Samsung Electronics vs. Tencent Music Entertainment |
| AGCO vs. GRIFFIN MINING LTD | AGCO vs. SERI INDUSTRIAL EO | AGCO vs. TELES Informationstechnologien AG | AGCO vs. Public Storage |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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