Correlation Between Samsung Electronics and ScalesLimited
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and ScalesLimited 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 ScalesLimited 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 Scales Limited, you can compare the effects of market volatilities on Samsung Electronics and ScalesLimited 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 ScalesLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and ScalesLimited.
Diversification Opportunities for Samsung Electronics and ScalesLimited
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and ScalesLimited is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Scales Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scales Limited 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 ScalesLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scales Limited has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and ScalesLimited go up and down completely randomly.
Pair Corralation between Samsung Electronics and ScalesLimited
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the ScalesLimited. In addition to that, Samsung Electronics is 1.12 times more volatile than Scales Limited. It trades about -0.08 of its total potential returns per unit of risk. Scales Limited is currently generating about 0.11 per unit of volatility. If you would invest 218.00 in Scales Limited on September 2, 2024 and sell it today you would earn a total of 12.00 from holding Scales Limited or generate 5.5% 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. Scales Limited
Performance |
| Timeline |
| Samsung Electronics |
| Scales Limited |
Samsung Electronics and ScalesLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and ScalesLimited
The main advantage of trading using opposite Samsung Electronics and ScalesLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, ScalesLimited 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 ScalesLimited will offset losses from the drop in ScalesLimited'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 |
| ScalesLimited vs. Apollo Investment Corp | ScalesLimited vs. New Residential Investment | ScalesLimited vs. EAT WELL INVESTMENT | ScalesLimited vs. WisdomTree Investments |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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