Correlation Between United States and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both United States and Samsung Electronics 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 United States and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Samsung Electronics Co, you can compare the effects of market volatilities on United States and Samsung Electronics 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 United States with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Samsung Electronics.
Diversification Opportunities for United States and Samsung Electronics
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Samsung is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and United States 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 United States Steel are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of United States i.e., United States and Samsung Electronics go up and down completely randomly.
Pair Corralation between United States and Samsung Electronics
Given the investment horizon of 90 days United States Steel is expected to generate 1.64 times more return on investment than Samsung Electronics. However, United States is 1.64 times more volatile than Samsung Electronics Co. It trades about 0.07 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.19 per unit of risk. If you would invest 74,011 in United States Steel on August 30, 2024 and sell it today you would earn a total of 8,399 from holding United States Steel or generate 11.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Samsung Electronics Co
Performance |
| Timeline |
| United States Steel |
| Samsung Electronics |
United States and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Samsung Electronics
The main advantage of trading using opposite United States and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| United States vs. Delta Air Lines | United States vs. Grupo Carso SAB | United States vs. McEwen Mining | United States vs. Monster Beverage Corp |
| Samsung Electronics vs. Taiwan Semiconductor Manufacturing | Samsung Electronics vs. Martin Marietta Materials | Samsung Electronics vs. The Bank of | Samsung Electronics vs. First Republic Bank |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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