Correlation Between Samsung Electronics and BankUnited
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and BankUnited 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 BankUnited 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 BankUnited, you can compare the effects of market volatilities on Samsung Electronics and BankUnited 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 BankUnited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and BankUnited.
Diversification Opportunities for Samsung Electronics and BankUnited
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and BankUnited is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and BankUnited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankUnited 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 BankUnited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankUnited has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and BankUnited go up and down completely randomly.
Pair Corralation between Samsung Electronics and BankUnited
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.43 times more return on investment than BankUnited. However, Samsung Electronics is 1.43 times more volatile than BankUnited. It trades about 0.19 of its potential returns per unit of risk. BankUnited is currently generating about -0.28 per unit of risk. If you would invest 71,200 in Samsung Electronics Co on November 28, 2024 and sell it today you would earn a total of 5,800 from holding Samsung Electronics Co or generate 8.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. BankUnited
Performance |
| Timeline |
| Samsung Electronics |
| BankUnited |
Samsung Electronics and BankUnited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and BankUnited
The main advantage of trading using opposite Samsung Electronics and BankUnited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, BankUnited 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 BankUnited will offset losses from the drop in BankUnited's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
| BankUnited vs. Renesas Electronics | BankUnited vs. Gol Intelligent Airlines | BankUnited vs. LPKF Laser Electronics | BankUnited vs. Schweizer Electronic AG |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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