Correlation Between Samsung Electronics and TC Energy
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and TC Energy 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 TC Energy 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 TC Energy, you can compare the effects of market volatilities on Samsung Electronics and TC Energy 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 TC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and TC Energy.
Diversification Opportunities for Samsung Electronics and TC Energy
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and TRS is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and TC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC Energy 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 TC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC Energy has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and TC Energy go up and down completely randomly.
Pair Corralation between Samsung Electronics and TC Energy
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the TC Energy. In addition to that, Samsung Electronics is 1.63 times more volatile than TC Energy. It trades about -0.06 of its total potential returns per unit of risk. TC Energy is currently generating about 0.16 per unit of volatility. If you would invest 3,392 in TC Energy on August 31, 2024 and sell it today you would earn a total of 1,181 from holding TC Energy or generate 34.82% 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. TC Energy
Performance |
| Timeline |
| Samsung Electronics |
| TC Energy |
Samsung Electronics and TC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and TC Energy
The main advantage of trading using opposite Samsung Electronics and TC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, TC Energy 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 TC Energy will offset losses from the drop in TC Energy's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
| TC Energy vs. Superior Plus Corp | TC Energy vs. NMI Holdings | TC Energy vs. Origin Agritech | TC Energy vs. SIVERS SEMICONDUCTORS AB |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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