Correlation Between Samsung Electronics and Preferred Bank
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Preferred Bank 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 Preferred Bank 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 Preferred Bank, you can compare the effects of market volatilities on Samsung Electronics and Preferred Bank 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 Preferred Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Preferred Bank.
Diversification Opportunities for Samsung Electronics and Preferred Bank
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Preferred is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Preferred Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Preferred Bank 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 Preferred Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Preferred Bank has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Preferred Bank go up and down completely randomly.
Pair Corralation between Samsung Electronics and Preferred Bank
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.72 times more return on investment than Preferred Bank. However, Samsung Electronics is 1.72 times more volatile than Preferred Bank. It trades about -0.02 of its potential returns per unit of risk. Preferred Bank is currently generating about -0.38 per unit of risk. If you would invest 77,800 in Samsung Electronics Co on October 12, 2024 and sell it today you would lose (800.00) from holding Samsung Electronics Co or give up 1.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Preferred Bank
Performance |
| Timeline |
| Samsung Electronics |
| Preferred Bank |
Samsung Electronics and Preferred Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Preferred Bank
The main advantage of trading using opposite Samsung Electronics and Preferred Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Preferred Bank 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 Preferred Bank will offset losses from the drop in Preferred Bank's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
| Preferred Bank vs. Keck Seng Investments | Preferred Bank vs. PennyMac Mortgage Investment | Preferred Bank vs. PennantPark Investment | Preferred Bank vs. GBS Software AG |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |