Correlation Between Samsung Electronics and Fidelity National
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Fidelity National 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 Fidelity National 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 Fidelity National Information, you can compare the effects of market volatilities on Samsung Electronics and Fidelity National 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 Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Fidelity National.
Diversification Opportunities for Samsung Electronics and Fidelity National
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Fidelity is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National 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 Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Fidelity National go up and down completely randomly.
Pair Corralation between Samsung Electronics and Fidelity National
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Fidelity National. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.04 times less risky than Fidelity National. The stock trades about -0.01 of its potential returns per unit of risk. The Fidelity National Information is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6,471 in Fidelity National Information on August 24, 2024 and sell it today you would earn a total of 1,578 from holding Fidelity National Information or generate 24.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Fidelity National Information
Performance |
| Timeline |
| Samsung Electronics |
| Fidelity National |
Samsung Electronics and Fidelity National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Fidelity National
The main advantage of trading using opposite Samsung Electronics and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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