Correlation Between Impax Environmental and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Impax Environmental 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 Impax Environmental and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Environmental Markets and Samsung Electronics Co, you can compare the effects of market volatilities on Impax Environmental 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 Impax Environmental with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Environmental and Samsung Electronics.
Diversification Opportunities for Impax Environmental and Samsung Electronics
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Impax and Samsung is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Impax Environmental Markets and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Impax Environmental 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 Impax Environmental Markets 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 Impax Environmental i.e., Impax Environmental and Samsung Electronics go up and down completely randomly.
Pair Corralation between Impax Environmental and Samsung Electronics
Assuming the 90 days trading horizon Impax Environmental Markets is expected to generate 0.44 times more return on investment than Samsung Electronics. However, Impax Environmental Markets is 2.25 times less risky than Samsung Electronics. It trades about -0.07 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.21 per unit of risk. If you would invest 38,200 in Impax Environmental Markets on September 25, 2024 and sell it today you would lose (500.00) from holding Impax Environmental Markets or give up 1.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Impax Environmental Markets vs. Samsung Electronics Co
Performance |
Timeline |
Impax Environmental |
Samsung Electronics |
Impax Environmental and Samsung Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Impax Environmental and Samsung Electronics
The main advantage of trading using opposite Impax Environmental and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Environmental 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.Impax Environmental vs. Samsung Electronics Co | Impax Environmental vs. Samsung Electronics Co | Impax Environmental vs. Hyundai Motor | Impax Environmental vs. Toyota Motor Corp |
Samsung Electronics vs. Impax Environmental Markets | Samsung Electronics vs. Zegona Communications Plc | Samsung Electronics vs. Gamma Communications PLC | Samsung Electronics vs. Spirent Communications plc |
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.
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