Correlation Between Samsung Electronics and AmerisourceBergen
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and AmerisourceBergen 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 AmerisourceBergen 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 AmerisourceBergen, you can compare the effects of market volatilities on Samsung Electronics and AmerisourceBergen 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 AmerisourceBergen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and AmerisourceBergen.
Diversification Opportunities for Samsung Electronics and AmerisourceBergen
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and AmerisourceBergen is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and AmerisourceBergen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmerisourceBergen 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 AmerisourceBergen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmerisourceBergen has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and AmerisourceBergen go up and down completely randomly.
Pair Corralation between Samsung Electronics and AmerisourceBergen
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 6.36 times less return on investment than AmerisourceBergen. In addition to that, Samsung Electronics is 1.85 times more volatile than AmerisourceBergen. It trades about 0.02 of its total potential returns per unit of risk. AmerisourceBergen is currently generating about 0.24 per unit of volatility. If you would invest 21,519 in AmerisourceBergen on August 28, 2024 and sell it today you would earn a total of 1,686 from holding AmerisourceBergen or generate 7.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Samsung Electronics Co vs. AmerisourceBergen
Performance |
| Timeline |
| Samsung Electronics |
| AmerisourceBergen |
Samsung Electronics and AmerisourceBergen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and AmerisourceBergen
The main advantage of trading using opposite Samsung Electronics and AmerisourceBergen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, AmerisourceBergen 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 AmerisourceBergen will offset losses from the drop in AmerisourceBergen's long position.| Samsung Electronics vs. RELIANCE STEEL AL | Samsung Electronics vs. Daido Steel Co | Samsung Electronics vs. COSMOSTEEL HLDGS | Samsung Electronics vs. FAST RETAIL ADR |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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