Correlation Between Samsung Electronics and Mr Cooper
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Mr Cooper 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 Mr Cooper 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 Mr Cooper Group, you can compare the effects of market volatilities on Samsung Electronics and Mr Cooper 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 Mr Cooper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Mr Cooper.
Diversification Opportunities for Samsung Electronics and Mr Cooper
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and 07WA is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Mr Cooper Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mr Cooper Group 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 Mr Cooper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mr Cooper Group has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Mr Cooper go up and down completely randomly.
Pair Corralation between Samsung Electronics and Mr Cooper
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.59 times more return on investment than Mr Cooper. However, Samsung Electronics is 1.59 times more volatile than Mr Cooper Group. It trades about 0.23 of its potential returns per unit of risk. Mr Cooper Group is currently generating about 0.1 per unit of risk. If you would invest 71,200 in Samsung Electronics Co on November 28, 2024 and sell it today you would earn a total of 7,400 from holding Samsung Electronics Co or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Mr Cooper Group
Performance |
| Timeline |
| Samsung Electronics |
| Mr Cooper Group |
Samsung Electronics and Mr Cooper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Mr Cooper
The main advantage of trading using opposite Samsung Electronics and Mr Cooper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Mr Cooper 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 Mr Cooper will offset losses from the drop in Mr Cooper's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
| Mr Cooper vs. VULCAN MATERIALS | Mr Cooper vs. Japan Tobacco | Mr Cooper vs. Carsales | Mr Cooper vs. BOS BETTER ONLINE |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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