Correlation Between Cornish Metals and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Cornish Metals 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 Cornish Metals and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Samsung Electronics Co, you can compare the effects of market volatilities on Cornish Metals 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 Cornish Metals with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Samsung Electronics.
Diversification Opportunities for Cornish Metals and Samsung Electronics
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cornish and Samsung is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Cornish Metals 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 Cornish Metals 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 Cornish Metals i.e., Cornish Metals and Samsung Electronics go up and down completely randomly.
Pair Corralation between Cornish Metals and Samsung Electronics
Assuming the 90 days trading horizon Cornish Metals is expected to generate 1.57 times more return on investment than Samsung Electronics. However, Cornish Metals is 1.57 times more volatile than Samsung Electronics Co. It trades about 0.27 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.05 per unit of risk. If you would invest 815.00 in Cornish Metals on October 8, 2024 and sell it today you would earn a total of 105.00 from holding Cornish Metals or generate 12.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cornish Metals vs. Samsung Electronics Co
Performance |
Timeline |
Cornish Metals |
Samsung Electronics |
Cornish Metals and Samsung Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cornish Metals and Samsung Electronics
The main advantage of trading using opposite Cornish Metals and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals 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.Cornish Metals vs. Allianz Technology Trust | Cornish Metals vs. Jacquet Metal Service | Cornish Metals vs. International Biotechnology Trust | Cornish Metals vs. Panther Metals PLC |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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