Correlation Between Samsung Electronics and Ambac Financial
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Ambac Financial 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 Ambac Financial 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 Ambac Financial Group, you can compare the effects of market volatilities on Samsung Electronics and Ambac Financial 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 Ambac Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Ambac Financial.
Diversification Opportunities for Samsung Electronics and Ambac Financial
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Ambac is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Ambac Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambac Financial Group 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 Ambac Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambac Financial Group has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Ambac Financial go up and down completely randomly.
Pair Corralation between Samsung Electronics and Ambac Financial
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the Ambac Financial. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.05 times less risky than Ambac Financial. The stock trades about -0.19 of its potential returns per unit of risk. The Ambac Financial Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,140 in Ambac Financial Group on September 22, 2024 and sell it today you would earn a total of 20.00 from holding Ambac Financial Group or generate 1.75% 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. Ambac Financial Group
Performance |
| Timeline |
| Samsung Electronics |
| Ambac Financial Group |
Samsung Electronics and Ambac Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Ambac Financial
The main advantage of trading using opposite Samsung Electronics and Ambac Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Ambac Financial 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 Ambac Financial will offset losses from the drop in Ambac Financial's long position.| Samsung Electronics vs. INSURANCE AUST GRP | Samsung Electronics vs. MCEWEN MINING INC | Samsung Electronics vs. Selective Insurance Group | Samsung Electronics vs. Universal Insurance Holdings |
| Ambac Financial vs. WisdomTree Investments | Ambac Financial vs. SLR Investment Corp | Ambac Financial vs. EAT WELL INVESTMENT | Ambac Financial vs. New Residential Investment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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