Correlation Between Samsung Electronics and Kyocera
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Kyocera 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 Kyocera 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 Kyocera, you can compare the effects of market volatilities on Samsung Electronics and Kyocera 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 Kyocera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Kyocera.
Diversification Opportunities for Samsung Electronics and Kyocera
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Kyocera is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Kyocera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyocera 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 Kyocera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyocera has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Kyocera go up and down completely randomly.
Pair Corralation between Samsung Electronics and Kyocera
Assuming the 90 days trading horizon Samsung Electronics Co is not expected to generate positive returns. Moreover, Samsung Electronics is 1.44 times more volatile than Kyocera. It trades away all of its potential returns to assume current level of volatility. Kyocera is currently generating about -0.12 per unit of risk. If you would invest 82,200 in Samsung Electronics Co on August 31, 2024 and sell it today you would lose (800.00) from holding Samsung Electronics Co or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Kyocera
Performance |
| Timeline |
| Samsung Electronics |
| Kyocera |
Samsung Electronics and Kyocera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Kyocera
The main advantage of trading using opposite Samsung Electronics and Kyocera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Kyocera 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 Kyocera will offset losses from the drop in Kyocera's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
| Kyocera vs. ATRESMEDIA | Kyocera vs. UMC Electronics Co | Kyocera vs. STMicroelectronics NV | Kyocera vs. LG Display Co |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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