Correlation Between Samsung Electronics and Sany Heavy
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sany Heavy 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 Sany Heavy 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 Sany Heavy Equipment, you can compare the effects of market volatilities on Samsung Electronics and Sany Heavy 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 Sany Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sany Heavy.
Diversification Opportunities for Samsung Electronics and Sany Heavy
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Sany is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sany Heavy Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sany Heavy Equipment 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 Sany Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sany Heavy Equipment has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sany Heavy go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sany Heavy
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the Sany Heavy. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.17 times less risky than Sany Heavy. The stock trades about -0.07 of its potential returns per unit of risk. The Sany Heavy Equipment is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 58.00 in Sany Heavy Equipment on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Sany Heavy Equipment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Sany Heavy Equipment
Performance |
| Timeline |
| Samsung Electronics |
| Sany Heavy Equipment |
Samsung Electronics and Sany Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Sany Heavy
The main advantage of trading using opposite Samsung Electronics and Sany Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sany Heavy 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 Sany Heavy will offset losses from the drop in Sany Heavy's long position.| Samsung Electronics vs. ARISTOCRAT LEISURE | Samsung Electronics vs. Universal Display | Samsung Electronics vs. PLAYTIKA HOLDING DL 01 | Samsung Electronics vs. TRAVEL LEISURE DL 01 |
| Sany Heavy vs. United Rentals | Sany Heavy vs. SHIP HEALTHCARE HLDGINC | Sany Heavy vs. Air Lease | Sany Heavy vs. DXC Technology 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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