Correlation Between Samsung Electronics and AMP
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and AMP 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 AMP 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 AMP, you can compare the effects of market volatilities on Samsung Electronics and AMP 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 AMP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and AMP.
Diversification Opportunities for Samsung Electronics and AMP
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and AMP is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and AMP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMP 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 AMP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMP has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and AMP go up and down completely randomly.
Pair Corralation between Samsung Electronics and AMP
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the AMP. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.23 times less risky than AMP. The stock trades about -0.03 of its potential returns per unit of risk. The AMP is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 58.00 in AMP on September 12, 2024 and sell it today you would earn a total of 37.00 from holding AMP or generate 63.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Samsung Electronics Co vs. AMP
Performance |
| Timeline |
| Samsung Electronics |
| AMP |
Samsung Electronics and AMP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and AMP
The main advantage of trading using opposite Samsung Electronics and AMP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, AMP 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 AMP will offset losses from the drop in AMP's long position.| Samsung Electronics vs. Align Technology | Samsung Electronics vs. Vishay Intertechnology | Samsung Electronics vs. Sunny Optical Technology | Samsung Electronics vs. Nufarm Limited |
| AMP vs. STRAYER EDUCATION | AMP vs. STMicroelectronics NV | AMP vs. American Public Education | AMP vs. KIMBALL ELECTRONICS |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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