Correlation Between Samsung Electronics and SPDR Gold
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and SPDR Gold 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 SPDR Gold 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 SPDR Gold Shares, you can compare the effects of market volatilities on Samsung Electronics and SPDR Gold 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 SPDR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and SPDR Gold.
Diversification Opportunities for Samsung Electronics and SPDR Gold
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and SPDR is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and SPDR Gold Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Gold Shares 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 SPDR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Gold Shares has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and SPDR Gold go up and down completely randomly.
Pair Corralation between Samsung Electronics and SPDR Gold
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the SPDR Gold. In addition to that, Samsung Electronics is 2.32 times more volatile than SPDR Gold Shares. It trades about -0.01 of its total potential returns per unit of risk. SPDR Gold Shares is currently generating about 0.1 per unit of volatility. If you would invest 17,256 in SPDR Gold Shares on August 31, 2024 and sell it today you would earn a total of 5,849 from holding SPDR Gold Shares or generate 33.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.75% |
| Values | Daily Returns |
Samsung Electronics Co vs. SPDR Gold Shares
Performance |
| Timeline |
| Samsung Electronics |
| SPDR Gold Shares |
Samsung Electronics and SPDR Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and SPDR Gold
The main advantage of trading using opposite Samsung Electronics and SPDR Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, SPDR Gold 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 SPDR Gold will offset losses from the drop in SPDR Gold'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 |
| SPDR Gold vs. Cardinal Health | SPDR Gold vs. Kaiser Aluminum | SPDR Gold vs. YOOMA WELLNESS INC | SPDR Gold vs. FEMALE HEALTH |
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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