Correlation Between Samsung Electronics and ISU Abxis
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and ISU Abxis 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 ISU Abxis 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 ISU Abxis Co, you can compare the effects of market volatilities on Samsung Electronics and ISU Abxis 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 ISU Abxis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and ISU Abxis.
Diversification Opportunities for Samsung Electronics and ISU Abxis
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and ISU is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and ISU Abxis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISU Abxis 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 ISU Abxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISU Abxis has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and ISU Abxis go up and down completely randomly.
Pair Corralation between Samsung Electronics and ISU Abxis
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the ISU Abxis. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 2.09 times less risky than ISU Abxis. The stock trades about -0.05 of its potential returns per unit of risk. The ISU Abxis Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 472,000 in ISU Abxis Co on December 11, 2024 and sell it today you would earn a total of 112,000 from holding ISU Abxis Co or generate 23.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. ISU Abxis Co
Performance |
Timeline |
Samsung Electronics |
ISU Abxis |
Samsung Electronics and ISU Abxis Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and ISU Abxis
The main advantage of trading using opposite Samsung Electronics and ISU Abxis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, ISU Abxis 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 ISU Abxis will offset losses from the drop in ISU Abxis' long position.Samsung Electronics vs. Barunson Entertainment Arts | Samsung Electronics vs. Aju IB Investment | Samsung Electronics vs. Stic Investments | Samsung Electronics vs. SV Investment |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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