Correlation Between Samsung Electronics and Assured Guaranty
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Assured Guaranty 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 Assured Guaranty 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 Assured Guaranty, you can compare the effects of market volatilities on Samsung Electronics and Assured Guaranty 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 Assured Guaranty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Assured Guaranty.
Diversification Opportunities for Samsung Electronics and Assured Guaranty
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Assured is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Assured Guaranty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assured Guaranty 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 Assured Guaranty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assured Guaranty has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Assured Guaranty go up and down completely randomly.
Pair Corralation between Samsung Electronics and Assured Guaranty
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Assured Guaranty. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.55 times less risky than Assured Guaranty. The stock trades about 0.0 of its potential returns per unit of risk. The Assured Guaranty is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,636 in Assured Guaranty on September 14, 2024 and sell it today you would earn a total of 3,014 from holding Assured Guaranty or generate 53.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Samsung Electronics Co vs. Assured Guaranty
Performance |
| Timeline |
| Samsung Electronics |
| Assured Guaranty |
Samsung Electronics and Assured Guaranty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Assured Guaranty
The main advantage of trading using opposite Samsung Electronics and Assured Guaranty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Assured Guaranty 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 Assured Guaranty will offset losses from the drop in Assured Guaranty's long position.| Samsung Electronics vs. TRAINLINE PLC LS | Samsung Electronics vs. QUEEN S ROAD | Samsung Electronics vs. AGNC INVESTMENT | Samsung Electronics vs. KAUFMAN ET BROAD |
| Assured Guaranty vs. First American Financial | Assured Guaranty vs. MGIC Investment | Assured Guaranty vs. Lancashire Holdings Limited | Assured Guaranty vs. Trisura Group |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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