Correlation Between Samsung Electronics and Deere
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Deere 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 Deere 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 Deere Company, you can compare the effects of market volatilities on Samsung Electronics and Deere 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 Deere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Deere.
Diversification Opportunities for Samsung Electronics and Deere
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Deere is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Deere Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deere Company 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 Deere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deere Company has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Deere go up and down completely randomly.
Pair Corralation between Samsung Electronics and Deere
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Deere. In addition to that, Samsung Electronics is 1.06 times more volatile than Deere Company. It trades about -0.01 of its total potential returns per unit of risk. Deere Company is currently generating about 0.3 per unit of volatility. If you would invest 37,335 in Deere Company on September 1, 2024 and sell it today you would earn a total of 6,745 from holding Deere Company or generate 18.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. Deere Company
Performance |
| Timeline |
| Samsung Electronics |
| Deere Company |
Samsung Electronics and Deere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Deere
The main advantage of trading using opposite Samsung Electronics and Deere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Deere 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 Deere will offset losses from the drop in Deere's long position.| Samsung Electronics vs. Chiba Bank | Samsung Electronics vs. VULCAN MATERIALS | Samsung Electronics vs. Compagnie Plastic Omnium | Samsung Electronics vs. Rayonier Advanced Materials |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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