Correlation Between Samsung Electronics and SoftBank Group
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and SoftBank Group 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 SoftBank Group 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 SoftBank Group Corp, you can compare the effects of market volatilities on Samsung Electronics and SoftBank Group 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 SoftBank Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and SoftBank Group.
Diversification Opportunities for Samsung Electronics and SoftBank Group
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and SoftBank is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and SoftBank Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoftBank Group Corp 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 SoftBank Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoftBank Group Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and SoftBank Group go up and down completely randomly.
Pair Corralation between Samsung Electronics and SoftBank Group
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the SoftBank Group. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 4.84 times less risky than SoftBank Group. The stock trades about -0.04 of its potential returns per unit of risk. The SoftBank Group Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 678.00 in SoftBank Group Corp on September 2, 2024 and sell it today you would earn a total of 5,031 from holding SoftBank Group Corp or generate 742.04% 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. SoftBank Group Corp
Performance |
| Timeline |
| Samsung Electronics |
| SoftBank Group Corp |
Samsung Electronics and SoftBank Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and SoftBank Group
The main advantage of trading using opposite Samsung Electronics and SoftBank Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, SoftBank Group 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 SoftBank Group will offset losses from the drop in SoftBank Group's long position.| Samsung Electronics vs. ScanSource | Samsung Electronics vs. QBE Insurance Group | Samsung Electronics vs. LIFENET INSURANCE CO | Samsung Electronics vs. Selective Insurance Group |
| SoftBank Group vs. Tencent Holdings | SoftBank Group vs. BYD Company Limited | SoftBank Group vs. Geely Automobile Holdings | SoftBank Group vs. Baidu Inc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| CEOs Directory Screen CEOs from public companies around the world |