Correlation Between Samsung Electronics and GAMING FAC
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and GAMING FAC 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 GAMING FAC 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 GAMING FAC SA, you can compare the effects of market volatilities on Samsung Electronics and GAMING FAC 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 GAMING FAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and GAMING FAC.
Diversification Opportunities for Samsung Electronics and GAMING FAC
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and GAMING is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and GAMING FAC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMING FAC SA 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 GAMING FAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMING FAC SA has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and GAMING FAC go up and down completely randomly.
Pair Corralation between Samsung Electronics and GAMING FAC
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.7 times more return on investment than GAMING FAC. However, Samsung Electronics Co is 1.42 times less risky than GAMING FAC. It trades about -0.04 of its potential returns per unit of risk. GAMING FAC SA is currently generating about -0.09 per unit of risk. If you would invest 101,127 in Samsung Electronics Co on August 28, 2024 and sell it today you would lose (16,927) from holding Samsung Electronics Co or give up 16.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. GAMING FAC SA
Performance |
| Timeline |
| Samsung Electronics |
| GAMING FAC SA |
Samsung Electronics and GAMING FAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and GAMING FAC
The main advantage of trading using opposite Samsung Electronics and GAMING FAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, GAMING FAC 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 GAMING FAC will offset losses from the drop in GAMING FAC's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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