Correlation Between Samsung Electronics and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Benchmark Electronics 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 Benchmark Electronics 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 Benchmark Electronics, you can compare the effects of market volatilities on Samsung Electronics and Benchmark Electronics 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 Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Benchmark Electronics.
Diversification Opportunities for Samsung Electronics and Benchmark Electronics
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Benchmark is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics 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 Benchmark Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Electronics has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Benchmark Electronics go up and down completely randomly.
Pair Corralation between Samsung Electronics and Benchmark Electronics
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 4.95 times less return on investment than Benchmark Electronics. But when comparing it to its historical volatility, Samsung Electronics Co is 1.06 times less risky than Benchmark Electronics. It trades about 0.03 of its potential returns per unit of risk. Benchmark Electronics is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,120 in Benchmark Electronics on August 27, 2024 and sell it today you would earn a total of 360.00 from holding Benchmark Electronics or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Benchmark Electronics
Performance |
| Timeline |
| Samsung Electronics |
| Benchmark Electronics |
Samsung Electronics and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Benchmark Electronics
The main advantage of trading using opposite Samsung Electronics and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Benchmark Electronics 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 Benchmark Electronics will offset losses from the drop in Benchmark Electronics' long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
| Benchmark Electronics vs. Superior Plus Corp | Benchmark Electronics vs. NMI Holdings | Benchmark Electronics vs. Origin Agritech | Benchmark Electronics vs. SIVERS SEMICONDUCTORS AB |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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