Correlation Between Samsung Electronics and Integrated Diagnostics
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Integrated Diagnostics 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 Integrated Diagnostics 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 Integrated Diagnostics Holdings, you can compare the effects of market volatilities on Samsung Electronics and Integrated Diagnostics 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 Integrated Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Integrated Diagnostics.
Diversification Opportunities for Samsung Electronics and Integrated Diagnostics
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Integrated is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Integrated Diagnostics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Diagnostics 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 Integrated Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Diagnostics has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Integrated Diagnostics go up and down completely randomly.
Pair Corralation between Samsung Electronics and Integrated Diagnostics
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Integrated Diagnostics. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.7 times less risky than Integrated Diagnostics. The stock trades about -0.18 of its potential returns per unit of risk. The Integrated Diagnostics Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Integrated Diagnostics Holdings on September 26, 2024 and sell it today you would earn a total of 8.00 from holding Integrated Diagnostics Holdings or generate 22.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. Integrated Diagnostics Holding
Performance |
Timeline |
Samsung Electronics |
Integrated Diagnostics |
Samsung Electronics and Integrated Diagnostics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and Integrated Diagnostics
The main advantage of trading using opposite Samsung Electronics and Integrated Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Integrated Diagnostics 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 Integrated Diagnostics will offset losses from the drop in Integrated Diagnostics' long position.Samsung Electronics vs. Rightmove PLC | Samsung Electronics vs. Bioventix | Samsung Electronics vs. VeriSign | Samsung Electronics vs. Games Workshop Group |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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