Correlation Between Samsung Electronics and Beijing MediaLimited
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Beijing MediaLimited 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 Beijing MediaLimited 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 Beijing Media, you can compare the effects of market volatilities on Samsung Electronics and Beijing MediaLimited 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 Beijing MediaLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Beijing MediaLimited.
Diversification Opportunities for Samsung Electronics and Beijing MediaLimited
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Beijing is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Beijing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing MediaLimited 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 Beijing MediaLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing MediaLimited has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Beijing MediaLimited go up and down completely randomly.
Pair Corralation between Samsung Electronics and Beijing MediaLimited
Assuming the 90 days trading horizon Samsung Electronics Co is not expected to generate positive returns. However, Samsung Electronics Co is 1.04 times less risky than Beijing MediaLimited. It waists most of its returns potential to compensate for thr risk taken. Beijing MediaLimited is generating about 0.02 per unit of risk. If you would invest 3.55 in Beijing Media on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Beijing Media 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. Beijing Media
Performance |
| Timeline |
| Samsung Electronics |
| Beijing MediaLimited |
Samsung Electronics and Beijing MediaLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Beijing MediaLimited
The main advantage of trading using opposite Samsung Electronics and Beijing MediaLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Beijing MediaLimited 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 Beijing MediaLimited will offset losses from the drop in Beijing MediaLimited's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
| Beijing MediaLimited vs. NISSAN CHEMICAL IND | Beijing MediaLimited vs. Seven West Media | Beijing MediaLimited vs. Tencent Music Entertainment | Beijing MediaLimited vs. KINGBOARD CHEMICAL |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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