Correlation Between Samsung Electronics and JDS UNIPHASE
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and JDS UNIPHASE 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 JDS UNIPHASE 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 JDS UNIPHASE, you can compare the effects of market volatilities on Samsung Electronics and JDS UNIPHASE 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 JDS UNIPHASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and JDS UNIPHASE.
Diversification Opportunities for Samsung Electronics and JDS UNIPHASE
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and JDS is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and JDS UNIPHASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JDS UNIPHASE 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 JDS UNIPHASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JDS UNIPHASE has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and JDS UNIPHASE go up and down completely randomly.
Pair Corralation between Samsung Electronics and JDS UNIPHASE
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the JDS UNIPHASE. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.17 times less risky than JDS UNIPHASE. The stock trades about -0.01 of its potential returns per unit of risk. The JDS UNIPHASE is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,031 in JDS UNIPHASE on September 4, 2024 and sell it today you would lose (96.00) from holding JDS UNIPHASE or give up 9.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Samsung Electronics Co vs. JDS UNIPHASE
Performance |
| Timeline |
| Samsung Electronics |
| JDS UNIPHASE |
Samsung Electronics and JDS UNIPHASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and JDS UNIPHASE
The main advantage of trading using opposite Samsung Electronics and JDS UNIPHASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, JDS UNIPHASE 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 JDS UNIPHASE will offset losses from the drop in JDS UNIPHASE's long position.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Xiaomi | Samsung Electronics vs. Panasonic Corp |
| JDS UNIPHASE vs. Martin Marietta Materials | JDS UNIPHASE vs. Computer And Technologies | JDS UNIPHASE vs. Japan Tobacco | JDS UNIPHASE vs. Plastic Omnium |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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