Correlation Between Samsung Electronics and Qingdao Haier
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Qingdao Haier 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 Qingdao Haier 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 Qingdao Haier Co, you can compare the effects of market volatilities on Samsung Electronics and Qingdao Haier 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 Qingdao Haier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Qingdao Haier.
Diversification Opportunities for Samsung Electronics and Qingdao Haier
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Qingdao is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Qingdao Haier Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Haier 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 Qingdao Haier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Haier has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Qingdao Haier go up and down completely randomly.
Pair Corralation between Samsung Electronics and Qingdao Haier
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Qingdao Haier. In addition to that, Samsung Electronics is 1.48 times more volatile than Qingdao Haier Co. It trades about -0.07 of its total potential returns per unit of risk. Qingdao Haier Co is currently generating about -0.02 per unit of volatility. If you would invest 172.00 in Qingdao Haier Co on September 3, 2024 and sell it today you would lose (2.00) from holding Qingdao Haier Co or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Qingdao Haier Co
Performance |
| Timeline |
| Samsung Electronics |
| Qingdao Haier |
Samsung Electronics and Qingdao Haier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Qingdao Haier
The main advantage of trading using opposite Samsung Electronics and Qingdao Haier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Qingdao Haier 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 Qingdao Haier will offset losses from the drop in Qingdao Haier's long position.| Samsung Electronics vs. ELMOS SEMICONDUCTOR | Samsung Electronics vs. Ping An Insurance | Samsung Electronics vs. NXP Semiconductors NV | Samsung Electronics vs. American Eagle Outfitters |
| Qingdao Haier vs. PLAYTIKA HOLDING DL 01 | Qingdao Haier vs. Playtech plc | Qingdao Haier vs. USWE SPORTS AB | Qingdao Haier vs. COLUMBIA SPORTSWEAR |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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