Correlation Between Samsung Electronics and SoftBank Group
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and SoftBank Group 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 SoftBank Group 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 SoftBank Group Corp, you can compare the effects of market volatilities on Samsung Electronics and SoftBank Group 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 SoftBank Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and SoftBank Group.
Diversification Opportunities for Samsung Electronics and SoftBank Group
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and SoftBank is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and SoftBank Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoftBank Group Corp 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 SoftBank Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoftBank Group Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and SoftBank Group go up and down completely randomly.
Pair Corralation between Samsung Electronics and SoftBank Group
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the SoftBank Group. In addition to that, Samsung Electronics is 1.11 times more volatile than SoftBank Group Corp. It trades about -0.05 of its total potential returns per unit of risk. SoftBank Group Corp is currently generating about 0.01 per unit of volatility. If you would invest 5,580 in SoftBank Group Corp on August 30, 2024 and sell it today you would lose (20.00) from holding SoftBank Group Corp or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. SoftBank Group Corp
Performance |
| Timeline |
| Samsung Electronics |
| SoftBank Group Corp |
Samsung Electronics and SoftBank Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and SoftBank Group
The main advantage of trading using opposite Samsung Electronics and SoftBank Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, SoftBank Group 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 SoftBank Group will offset losses from the drop in SoftBank Group's long position.| Samsung Electronics vs. Fast Retailing Co | Samsung Electronics vs. AUTO TRADER ADR | Samsung Electronics vs. RETAIL FOOD GROUP | Samsung Electronics vs. Tradeweb Markets |
| SoftBank Group vs. Tencent Holdings | SoftBank Group vs. BYD Company Limited | SoftBank Group vs. Geely Automobile Holdings | SoftBank Group vs. Baidu Inc |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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