Correlation Between Samsung Electronics and KALRAY SA
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and KALRAY SA 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 KALRAY SA 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 KALRAY SA EO, you can compare the effects of market volatilities on Samsung Electronics and KALRAY SA 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 KALRAY SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and KALRAY SA.
Diversification Opportunities for Samsung Electronics and KALRAY SA
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Samsung and KALRAY is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and KALRAY SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KALRAY SA EO 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 KALRAY SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KALRAY SA EO has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and KALRAY SA go up and down completely randomly.
Pair Corralation between Samsung Electronics and KALRAY SA
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.37 times more return on investment than KALRAY SA. However, Samsung Electronics Co is 2.73 times less risky than KALRAY SA. It trades about 0.02 of its potential returns per unit of risk. KALRAY SA EO is currently generating about -0.28 per unit of risk. If you would invest 73,400 in Samsung Electronics Co on October 25, 2024 and sell it today you would earn a total of 400.00 from holding Samsung Electronics Co or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Samsung Electronics Co vs. KALRAY SA EO
Performance |
| Timeline |
| Samsung Electronics |
| KALRAY SA EO |
Samsung Electronics and KALRAY SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and KALRAY SA
The main advantage of trading using opposite Samsung Electronics and KALRAY SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, KALRAY SA 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 KALRAY SA will offset losses from the drop in KALRAY SA's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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