Correlation Between Samsung Electronics and Radian
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Radian 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 Radian 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 Radian Group, you can compare the effects of market volatilities on Samsung Electronics and Radian 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 Radian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Radian.
Diversification Opportunities for Samsung Electronics and Radian
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Radian is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Radian Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radian Group 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 Radian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radian Group has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Radian go up and down completely randomly.
Pair Corralation between Samsung Electronics and Radian
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Radian. In addition to that, Samsung Electronics is 1.25 times more volatile than Radian Group. It trades about -0.04 of its total potential returns per unit of risk. Radian Group is currently generating about 0.09 per unit of volatility. If you would invest 2,240 in Radian Group on September 14, 2024 and sell it today you would earn a total of 940.00 from holding Radian Group or generate 41.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Radian Group
Performance |
| Timeline |
| Samsung Electronics |
| Radian Group |
Samsung Electronics and Radian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Radian
The main advantage of trading using opposite Samsung Electronics and Radian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Radian 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 Radian will offset losses from the drop in Radian's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Sony Group | Samsung Electronics vs. Superior Plus Corp | Samsung Electronics vs. SIVERS SEMICONDUCTORS AB |
| Radian vs. First American Financial | Radian vs. MGIC Investment | Radian vs. Lancashire Holdings Limited | Radian vs. Trisura Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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