Correlation Between Sanyo Chemical and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Sanyo Chemical 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 Sanyo Chemical and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanyo Chemical Industries and Samsung Electronics Co, you can compare the effects of market volatilities on Sanyo Chemical 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 Sanyo Chemical with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and Samsung Electronics.
Diversification Opportunities for Sanyo Chemical and Samsung Electronics
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sanyo and Samsung is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Sanyo Chemical 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 Sanyo Chemical Industries 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 Sanyo Chemical i.e., Sanyo Chemical and Samsung Electronics go up and down completely randomly.
Pair Corralation between Sanyo Chemical and Samsung Electronics
Assuming the 90 days horizon Sanyo Chemical Industries is expected to generate 0.64 times more return on investment than Samsung Electronics. However, Sanyo Chemical Industries is 1.55 times less risky than Samsung Electronics. It trades about 0.03 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.1 per unit of risk. If you would invest 2,280 in Sanyo Chemical Industries on October 13, 2024 and sell it today you would earn a total of 120.00 from holding Sanyo Chemical Industries or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. Samsung Electronics Co
Performance |
| Timeline |
| Sanyo Chemical Industries |
| Samsung Electronics |
Sanyo Chemical and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and Samsung Electronics
The main advantage of trading using opposite Sanyo Chemical and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo Chemical 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.| Sanyo Chemical vs. CN MODERN DAIRY | Sanyo Chemical vs. MTY Food Group | Sanyo Chemical vs. BANKINTER ADR 2007 | Sanyo Chemical vs. PNC Financial Services |
| Samsung Electronics vs. INDO RAMA SYNTHETIC | Samsung Electronics vs. Mitsubishi Gas Chemical | Samsung Electronics vs. United Natural Foods | Samsung Electronics vs. Sanyo Chemical Industries |
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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