Correlation Between Samsung Electronics and CHINA FORTUNE
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and CHINA FORTUNE 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 CHINA FORTUNE 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 CHINA FORTUNE HLDGHD001, you can compare the effects of market volatilities on Samsung Electronics and CHINA FORTUNE 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 CHINA FORTUNE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and CHINA FORTUNE.
Diversification Opportunities for Samsung Electronics and CHINA FORTUNE
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and CHINA is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and CHINA FORTUNE HLDGHD001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA FORTUNE HLDGHD001 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 CHINA FORTUNE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA FORTUNE HLDGHD001 has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and CHINA FORTUNE go up and down completely randomly.
Pair Corralation between Samsung Electronics and CHINA FORTUNE
Assuming the 90 days horizon Samsung Electronics is expected to generate 26.96 times less return on investment than CHINA FORTUNE. But when comparing it to its historical volatility, Samsung Electronics Co is 19.01 times less risky than CHINA FORTUNE. It trades about 0.13 of its potential returns per unit of risk. CHINA FORTUNE HLDGHD001 is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 0.80 in CHINA FORTUNE HLDGHD001 on November 28, 2024 and sell it today you would earn a total of 0.90 from holding CHINA FORTUNE HLDGHD001 or generate 112.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. CHINA FORTUNE HLDGHD001
Performance |
| Timeline |
| Samsung Electronics |
| CHINA FORTUNE HLDGHD001 |
Samsung Electronics and CHINA FORTUNE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and CHINA FORTUNE
The main advantage of trading using opposite Samsung Electronics and CHINA FORTUNE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, CHINA FORTUNE 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 CHINA FORTUNE will offset losses from the drop in CHINA FORTUNE's long position.| Samsung Electronics vs. LEONS FURNITURE | Samsung Electronics vs. Take Two Interactive Software | Samsung Electronics vs. FORMPIPE SOFTWARE AB | Samsung Electronics vs. American Homes 4 |
| CHINA FORTUNE vs. Apple Inc | CHINA FORTUNE vs. Apple Inc | CHINA FORTUNE vs. Samsung Electronics Co | CHINA FORTUNE vs. Samsung Electronics Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |