Correlation Between Samsung Electronics and Laureate Education
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Laureate Education 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 Laureate Education 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 Laureate Education, you can compare the effects of market volatilities on Samsung Electronics and Laureate Education 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 Laureate Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Laureate Education.
Diversification Opportunities for Samsung Electronics and Laureate Education
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Laureate is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Laureate Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laureate Education 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 Laureate Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laureate Education has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Laureate Education go up and down completely randomly.
Pair Corralation between Samsung Electronics and Laureate Education
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Laureate Education. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.13 times less risky than Laureate Education. The stock trades about -0.01 of its potential returns per unit of risk. The Laureate Education is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 855.00 in Laureate Education on September 19, 2024 and sell it today you would earn a total of 935.00 from holding Laureate Education or generate 109.36% 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. Laureate Education
Performance |
| Timeline |
| Samsung Electronics |
| Laureate Education |
Samsung Electronics and Laureate Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Laureate Education
The main advantage of trading using opposite Samsung Electronics and Laureate Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Laureate Education 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 Laureate Education will offset losses from the drop in Laureate Education's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
| Laureate Education vs. IDP EDUCATION LTD | Laureate Education vs. Superior Plus Corp | Laureate Education vs. SIVERS SEMICONDUCTORS AB | Laureate Education vs. Norsk Hydro ASA |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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