Correlation Between Samsung Electronics and Equifax
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Equifax 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 Equifax 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 Equifax, you can compare the effects of market volatilities on Samsung Electronics and Equifax 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 Equifax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Equifax.
Diversification Opportunities for Samsung Electronics and Equifax
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Equifax is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Equifax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equifax 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 Equifax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equifax has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Equifax go up and down completely randomly.
Pair Corralation between Samsung Electronics and Equifax
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Equifax. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.14 times less risky than Equifax. The stock trades about -0.03 of its potential returns per unit of risk. The Equifax is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 20,422 in Equifax on August 31, 2024 and sell it today you would earn a total of 4,378 from holding Equifax or generate 21.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Equifax
Performance |
| Timeline |
| Samsung Electronics |
| Equifax |
Samsung Electronics and Equifax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Equifax
The main advantage of trading using opposite Samsung Electronics and Equifax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Equifax 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 Equifax will offset losses from the drop in Equifax's long position.| Samsung Electronics vs. Eastman Chemical | Samsung Electronics vs. Sekisui Chemical Co | Samsung Electronics vs. Computer And Technologies | Samsung Electronics vs. WESTLAKE CHEMICAL |
| Equifax vs. Automatic Data Processing | Equifax vs. Superior Plus Corp | Equifax vs. NMI Holdings | Equifax vs. Origin Agritech |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |