Correlation Between Samsung Electronics and Sony Group
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sony 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 Sony 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 Sony Group Corp, you can compare the effects of market volatilities on Samsung Electronics and Sony 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 Sony Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sony Group.
Diversification Opportunities for Samsung Electronics and Sony Group
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Sony is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sony Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony 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 Sony Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Group Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sony Group go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sony Group
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Sony Group. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 4.2 times less risky than Sony Group. The stock trades about -0.06 of its potential returns per unit of risk. The Sony Group Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 779.00 in Sony Group Corp on October 20, 2024 and sell it today you would earn a total of 1,218 from holding Sony Group Corp or generate 156.35% 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. Sony Group Corp
Performance |
| Timeline |
| Samsung Electronics |
| Sony Group Corp |
Samsung Electronics and Sony Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Sony Group
The main advantage of trading using opposite Samsung Electronics and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sony 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 Sony Group will offset losses from the drop in Sony Group's long position.| Samsung Electronics vs. United Breweries Co | Samsung Electronics vs. InterContinental Hotels Group | Samsung Electronics vs. China Resources Beer | Samsung Electronics vs. PPHE HOTEL GROUP |
| Sony Group vs. Apple Inc | Sony Group vs. Apple Inc | Sony Group vs. Samsung Electronics Co | Sony Group vs. Samsung Electronics Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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