Correlation Between Samsung Electronics and Capitol Federal
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Capitol Federal 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 Capitol Federal 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 Capitol Federal Financial, you can compare the effects of market volatilities on Samsung Electronics and Capitol Federal 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 Capitol Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Capitol Federal.
Diversification Opportunities for Samsung Electronics and Capitol Federal
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Capitol is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Capitol Federal Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitol Federal Financial 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 Capitol Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitol Federal Financial has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Capitol Federal go up and down completely randomly.
Pair Corralation between Samsung Electronics and Capitol Federal
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Capitol Federal. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.14 times less risky than Capitol Federal. The stock trades about -0.04 of its potential returns per unit of risk. The Capitol Federal Financial is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 565.00 in Capitol Federal Financial on September 6, 2024 and sell it today you would earn a total of 60.00 from holding Capitol Federal Financial or generate 10.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. Capitol Federal Financial
Performance |
| Timeline |
| Samsung Electronics |
| Capitol Federal Financial |
Samsung Electronics and Capitol Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Capitol Federal
The main advantage of trading using opposite Samsung Electronics and Capitol Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Capitol Federal 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 Capitol Federal will offset losses from the drop in Capitol Federal's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
| Capitol Federal vs. Territorial Bancorp | Capitol Federal vs. Superior Plus Corp | Capitol Federal vs. Origin Agritech | Capitol Federal vs. Identiv |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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