Correlation Between Samsung Electronics and Anglo American
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Anglo American 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 Anglo American 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 Anglo American plc, you can compare the effects of market volatilities on Samsung Electronics and Anglo American 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 Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Anglo American.
Diversification Opportunities for Samsung Electronics and Anglo American
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Anglo is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Anglo American plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American plc 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 Anglo American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo American plc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Anglo American go up and down completely randomly.
Pair Corralation between Samsung Electronics and Anglo American
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the Anglo American. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.31 times less risky than Anglo American. The stock trades about 0.0 of its potential returns per unit of risk. The Anglo American plc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,352 in Anglo American plc on September 2, 2024 and sell it today you would lose (367.00) from holding Anglo American plc or give up 10.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Anglo American plc
Performance |
| Timeline |
| Samsung Electronics |
| Anglo American plc |
Samsung Electronics and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Anglo American
The main advantage of trading using opposite Samsung Electronics and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Anglo American 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 Anglo American will offset losses from the drop in Anglo American's long position.| Samsung Electronics vs. SLR Investment Corp | Samsung Electronics vs. APPLIED MATERIALS | Samsung Electronics vs. Mitsubishi Materials | Samsung Electronics vs. REGAL ASIAN INVESTMENTS |
| Anglo American vs. Data3 Limited | Anglo American vs. AVITA Medical | Anglo American vs. National Storage Affiliates | Anglo American vs. Datadog |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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