Correlation Between Samsung Electronics and Yangzijiang Shipbuilding
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Yangzijiang Shipbuilding 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 Yangzijiang Shipbuilding 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 Yangzijiang Shipbuilding, you can compare the effects of market volatilities on Samsung Electronics and Yangzijiang Shipbuilding 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 Yangzijiang Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Yangzijiang Shipbuilding.
Diversification Opportunities for Samsung Electronics and Yangzijiang Shipbuilding
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Yangzijiang is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Yangzijiang Shipbuilding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yangzijiang Shipbuilding 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 Yangzijiang Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yangzijiang Shipbuilding has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Yangzijiang Shipbuilding go up and down completely randomly.
Pair Corralation between Samsung Electronics and Yangzijiang Shipbuilding
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Yangzijiang Shipbuilding. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.02 times less risky than Yangzijiang Shipbuilding. The stock trades about -0.18 of its potential returns per unit of risk. The Yangzijiang Shipbuilding is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 174.00 in Yangzijiang Shipbuilding on August 31, 2024 and sell it today you would lose (6.00) from holding Yangzijiang Shipbuilding or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Yangzijiang Shipbuilding
Performance |
| Timeline |
| Samsung Electronics |
| Yangzijiang Shipbuilding |
Samsung Electronics and Yangzijiang Shipbuilding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Yangzijiang Shipbuilding
The main advantage of trading using opposite Samsung Electronics and Yangzijiang Shipbuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Yangzijiang Shipbuilding 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 Yangzijiang Shipbuilding will offset losses from the drop in Yangzijiang Shipbuilding'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 |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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