Correlation Between Samsung Electronics and River
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and River 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 River 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 River and Mercantile, you can compare the effects of market volatilities on Samsung Electronics and River 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 River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and River.
Diversification Opportunities for Samsung Electronics and River
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and River is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and River and Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on River and Mercantile 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 River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of River and Mercantile has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and River go up and down completely randomly.
Pair Corralation between Samsung Electronics and River
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the River. In addition to that, Samsung Electronics is 2.68 times more volatile than River and Mercantile. It trades about -0.12 of its total potential returns per unit of risk. River and Mercantile is currently generating about -0.04 per unit of volatility. If you would invest 18,450 in River and Mercantile on September 15, 2024 and sell it today you would lose (700.00) from holding River and Mercantile or give up 3.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. River and Mercantile
Performance |
Timeline |
Samsung Electronics |
River and Mercantile |
Samsung Electronics and River Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and River
The main advantage of trading using opposite Samsung Electronics and River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, River 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 River will offset losses from the drop in River's long position.Samsung Electronics vs. Rockfire Resources plc | Samsung Electronics vs. Tlou Energy | Samsung Electronics vs. Ikigai Ventures | Samsung Electronics vs. Falcon Oil Gas |
River vs. Melia Hotels | River vs. Samsung Electronics Co | River vs. United States Steel | River vs. Compal Electronics GDR |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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