Correlation Between Samsung Electronics and FIRST SAVINGS
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and FIRST SAVINGS 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 FIRST SAVINGS 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 FIRST SAVINGS FINL, you can compare the effects of market volatilities on Samsung Electronics and FIRST SAVINGS 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 FIRST SAVINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and FIRST SAVINGS.
Diversification Opportunities for Samsung Electronics and FIRST SAVINGS
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samsung and FIRST is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and FIRST SAVINGS FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST SAVINGS FINL 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 FIRST SAVINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST SAVINGS FINL has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and FIRST SAVINGS go up and down completely randomly.
Pair Corralation between Samsung Electronics and FIRST SAVINGS
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the FIRST SAVINGS. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.3 times less risky than FIRST SAVINGS. The stock trades about -0.02 of its potential returns per unit of risk. The FIRST SAVINGS FINL is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,641 in FIRST SAVINGS FINL on October 26, 2024 and sell it today you would earn a total of 599.00 from holding FIRST SAVINGS FINL or generate 36.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. FIRST SAVINGS FINL
Performance |
| Timeline |
| Samsung Electronics |
| FIRST SAVINGS FINL |
Samsung Electronics and FIRST SAVINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and FIRST SAVINGS
The main advantage of trading using opposite Samsung Electronics and FIRST SAVINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, FIRST SAVINGS 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 FIRST SAVINGS will offset losses from the drop in FIRST SAVINGS's long position.| Samsung Electronics vs. Thai Beverage Public | Samsung Electronics vs. Tsingtao Brewery | Samsung Electronics vs. DFS Furniture PLC | Samsung Electronics vs. BOSTON BEER A |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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