Correlation Between Samsung Electronics and Public Storage
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Public Storage 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 Public Storage 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 Public Storage, you can compare the effects of market volatilities on Samsung Electronics and Public Storage 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Public Storage.
Diversification Opportunities for Samsung Electronics and Public Storage
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Public is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Public Storage go up and down completely randomly.
Pair Corralation between Samsung Electronics and Public Storage
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Public Storage. In addition to that, Samsung Electronics is 1.57 times more volatile than Public Storage. It trades about -0.13 of its total potential returns per unit of risk. Public Storage is currently generating about -0.1 per unit of volatility. If you would invest 35,690 in Public Storage on September 13, 2024 and sell it today you would lose (3,290) from holding Public Storage or give up 9.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. Public Storage
Performance |
Timeline |
Samsung Electronics |
Public Storage |
Samsung Electronics and Public Storage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and Public Storage
The main advantage of trading using opposite Samsung Electronics and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage's long position.Samsung Electronics vs. MyHealthChecked Plc | Samsung Electronics vs. HCA Healthcare | Samsung Electronics vs. Worldwide Healthcare Trust | Samsung Electronics vs. Norwegian Air Shuttle |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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