Correlation Between Samsung Electronics and CELLULAR GOODS
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and CELLULAR GOODS 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 CELLULAR GOODS 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 CELLULAR GOODS LS, you can compare the effects of market volatilities on Samsung Electronics and CELLULAR GOODS 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 CELLULAR GOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and CELLULAR GOODS.
Diversification Opportunities for Samsung Electronics and CELLULAR GOODS
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and CELLULAR is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and CELLULAR GOODS LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CELLULAR GOODS LS 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 CELLULAR GOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CELLULAR GOODS LS has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and CELLULAR GOODS go up and down completely randomly.
Pair Corralation between Samsung Electronics and CELLULAR GOODS
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the CELLULAR GOODS. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 12.94 times less risky than CELLULAR GOODS. The stock trades about -0.01 of its potential returns per unit of risk. The CELLULAR GOODS LS is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.05 in CELLULAR GOODS LS on October 12, 2024 and sell it today you would earn a total of 0.00 from holding CELLULAR GOODS LS or generate 0.0% 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. CELLULAR GOODS LS
Performance |
| Timeline |
| Samsung Electronics |
| CELLULAR GOODS LS |
Samsung Electronics and CELLULAR GOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and CELLULAR GOODS
The main advantage of trading using opposite Samsung Electronics and CELLULAR GOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, CELLULAR GOODS 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 CELLULAR GOODS will offset losses from the drop in CELLULAR GOODS's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
| CELLULAR GOODS vs. Richardson Electronics | CELLULAR GOODS vs. STMICROELECTRONICS | CELLULAR GOODS vs. KIMBALL ELECTRONICS | CELLULAR GOODS vs. Samsung Electronics Co |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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