Correlation Between Samsung Electronics and AVITA Medical
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and AVITA Medical 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 AVITA Medical 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 AVITA Medical, you can compare the effects of market volatilities on Samsung Electronics and AVITA Medical 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 AVITA Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and AVITA Medical.
Diversification Opportunities for Samsung Electronics and AVITA Medical
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samsung and AVITA is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and AVITA Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVITA Medical 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 AVITA Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVITA Medical has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and AVITA Medical go up and down completely randomly.
Pair Corralation between Samsung Electronics and AVITA Medical
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.26 times more return on investment than AVITA Medical. However, Samsung Electronics Co is 3.91 times less risky than AVITA Medical. It trades about -0.27 of its potential returns per unit of risk. AVITA Medical is currently generating about -0.22 per unit of risk. If you would invest 79,200 in Samsung Electronics Co on November 5, 2024 and sell it today you would lose (7,600) from holding Samsung Electronics Co or give up 9.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. AVITA Medical
Performance |
| Timeline |
| Samsung Electronics |
| AVITA Medical |
Samsung Electronics and AVITA Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and AVITA Medical
The main advantage of trading using opposite Samsung Electronics and AVITA Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, AVITA Medical 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 AVITA Medical will offset losses from the drop in AVITA Medical's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
| AVITA Medical vs. SIVERS SEMICONDUCTORS AB | AVITA Medical vs. NorAm Drilling AS | AVITA Medical vs. Volkswagen AG | AVITA Medical vs. Darden Restaurants |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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