Correlation Between Samsung Electronics and Daito Trust
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Daito Trust 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 Daito Trust 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 Daito Trust Construction, you can compare the effects of market volatilities on Samsung Electronics and Daito Trust 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 Daito Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Daito Trust.
Diversification Opportunities for Samsung Electronics and Daito Trust
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Daito is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Daito Trust Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daito Trust Construction 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 Daito Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daito Trust Construction has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Daito Trust go up and down completely randomly.
Pair Corralation between Samsung Electronics and Daito Trust
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Daito Trust. In addition to that, Samsung Electronics is 1.38 times more volatile than Daito Trust Construction. It trades about -0.03 of its total potential returns per unit of risk. Daito Trust Construction is currently generating about 0.03 per unit of volatility. If you would invest 8,950 in Daito Trust Construction on August 31, 2024 and sell it today you would earn a total of 1,350 from holding Daito Trust Construction or generate 15.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Samsung Electronics Co vs. Daito Trust Construction
Performance |
| Timeline |
| Samsung Electronics |
| Daito Trust Construction |
Samsung Electronics and Daito Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Daito Trust
The main advantage of trading using opposite Samsung Electronics and Daito Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Daito Trust 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 Daito Trust will offset losses from the drop in Daito Trust's long position.| Samsung Electronics vs. Fukuyama Transporting Co | Samsung Electronics vs. Transportadora de Gas | Samsung Electronics vs. Gold Road Resources | Samsung Electronics vs. Japan Post Insurance |
| Daito Trust vs. Auto Trader Group | Daito Trust vs. Air New Zealand | Daito Trust vs. Altair Engineering | Daito Trust vs. WIZZ AIR HLDGUNSPADR4 |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |