Correlation Between Samsung Electronics and JOYY INCSPADR/20
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and JOYY INCSPADR/20 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 JOYY INCSPADR/20 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 JOYY INCSPADR20 CLA, you can compare the effects of market volatilities on Samsung Electronics and JOYY INCSPADR/20 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 JOYY INCSPADR/20. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and JOYY INCSPADR/20.
Diversification Opportunities for Samsung Electronics and JOYY INCSPADR/20
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and JOYY is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and JOYY INCSPADR20 CLA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JOYY INCSPADR20 CLA 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 JOYY INCSPADR/20. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JOYY INCSPADR20 CLA has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and JOYY INCSPADR/20 go up and down completely randomly.
Pair Corralation between Samsung Electronics and JOYY INCSPADR/20
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the JOYY INCSPADR/20. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.41 times less risky than JOYY INCSPADR/20. The stock trades about 0.0 of its potential returns per unit of risk. The JOYY INCSPADR20 CLA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,741 in JOYY INCSPADR20 CLA on August 26, 2024 and sell it today you would earn a total of 679.00 from holding JOYY INCSPADR20 CLA or generate 24.77% 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. JOYY INCSPADR20 CLA
Performance |
| Timeline |
| Samsung Electronics |
| JOYY INCSPADR20 CLA |
Samsung Electronics and JOYY INCSPADR/20 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and JOYY INCSPADR/20
The main advantage of trading using opposite Samsung Electronics and JOYY INCSPADR/20 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, JOYY INCSPADR/20 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 JOYY INCSPADR/20 will offset losses from the drop in JOYY INCSPADR/20's long position.| Samsung Electronics vs. Amazon Inc | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tesla Inc | Samsung Electronics vs. Alphabet Class A |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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