Correlation Between Samsung Electronics and Semiconductor Manufacturing
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Semiconductor Manufacturing 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 Semiconductor Manufacturing 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 Semiconductor Manufacturing International, you can compare the effects of market volatilities on Samsung Electronics and Semiconductor Manufacturing 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 Semiconductor Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Semiconductor Manufacturing.
Diversification Opportunities for Samsung Electronics and Semiconductor Manufacturing
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Semiconductor is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Semiconductor Manufacturing In in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semiconductor Manufacturing 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 Semiconductor Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semiconductor Manufacturing has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Semiconductor Manufacturing go up and down completely randomly.
Pair Corralation between Samsung Electronics and Semiconductor Manufacturing
If you would invest 75,200 in Samsung Electronics Co on October 11, 2024 and sell it today you would earn a total of 1,800 from holding Samsung Electronics Co or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Samsung Electronics Co vs. Semiconductor Manufacturing In
Performance |
| Timeline |
| Samsung Electronics |
| Semiconductor Manufacturing |
Samsung Electronics and Semiconductor Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Semiconductor Manufacturing
The main advantage of trading using opposite Samsung Electronics and Semiconductor Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Semiconductor Manufacturing 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 Semiconductor Manufacturing will offset losses from the drop in Semiconductor Manufacturing's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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