Correlation Between Samsung Electronics and Apple
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Samsung Electronics and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Apple.
Diversification Opportunities for Samsung Electronics and Apple
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Apple is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Apple go up and down completely randomly.
Pair Corralation between Samsung Electronics and Apple
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Apple. In addition to that, Samsung Electronics is 2.14 times more volatile than Apple Inc. It trades about -0.05 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.09 per unit of volatility. If you would invest 21,614 in Apple Inc on August 30, 2024 and sell it today you would earn a total of 591.00 from holding Apple Inc or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Apple Inc
Performance |
| Timeline |
| Samsung Electronics |
| Apple Inc |
Samsung Electronics and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Apple
The main advantage of trading using opposite Samsung Electronics and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Samsung Electronics vs. Apollo Medical Holdings | Samsung Electronics vs. EPSILON HEALTHCARE LTD | Samsung Electronics vs. FISH PAYK HEALTH | Samsung Electronics vs. Cardinal Health |
| Apple vs. Wayside Technology Group | Apple vs. Molson Coors Beverage | Apple vs. FANDIFI TECHNOLOGY P | Apple vs. MACOM Technology Solutions |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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