Correlation Between Samsung Electronics and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Uber Technologies 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 Uber Technologies 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 Uber Technologies, you can compare the effects of market volatilities on Samsung Electronics and Uber Technologies 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 Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Uber Technologies.
Diversification Opportunities for Samsung Electronics and Uber Technologies
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Uber is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Uber Technologies go up and down completely randomly.
Pair Corralation between Samsung Electronics and Uber Technologies
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 1.76 times less return on investment than Uber Technologies. But when comparing it to its historical volatility, Samsung Electronics Co is 1.31 times less risky than Uber Technologies. It trades about 0.09 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6,070 in Uber Technologies on December 30, 2024 and sell it today you would earn a total of 1,240 from holding Uber Technologies or generate 20.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. Uber Technologies
Performance |
Timeline |
Samsung Electronics |
Uber Technologies |
Samsung Electronics and Uber Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and Uber Technologies
The main advantage of trading using opposite Samsung Electronics and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.Samsung Electronics vs. Gaztransport et Technigaz | Samsung Electronics vs. Universal Display Corp | Samsung Electronics vs. Atalaya Mining | Samsung Electronics vs. Science in Sport |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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