Correlation Between Samsung Electronics and John Bean
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and John Bean 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 John Bean 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 John Bean Technologies, you can compare the effects of market volatilities on Samsung Electronics and John Bean 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 John Bean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and John Bean.
Diversification Opportunities for Samsung Electronics and John Bean
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and John is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and John Bean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Bean Technologies 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 John Bean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Bean Technologies has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and John Bean go up and down completely randomly.
Pair Corralation between Samsung Electronics and John Bean
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the John Bean. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.1 times less risky than John Bean. The stock trades about -0.03 of its potential returns per unit of risk. The John Bean Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 10,939 in John Bean Technologies on September 2, 2024 and sell it today you would earn a total of 761.00 from holding John Bean Technologies or generate 6.96% 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. John Bean Technologies
Performance |
| Timeline |
| Samsung Electronics |
| John Bean Technologies |
Samsung Electronics and John Bean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and John Bean
The main advantage of trading using opposite Samsung Electronics and John Bean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, John Bean 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 John Bean will offset losses from the drop in John Bean's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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