Correlation Between Samsung Electronics and IDEXX Laboratories
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and IDEXX Laboratories 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 IDEXX Laboratories 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 IDEXX Laboratories, you can compare the effects of market volatilities on Samsung Electronics and IDEXX Laboratories 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 IDEXX Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and IDEXX Laboratories.
Diversification Opportunities for Samsung Electronics and IDEXX Laboratories
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and IDEXX is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and IDEXX Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEXX Laboratories 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 IDEXX Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEXX Laboratories has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and IDEXX Laboratories go up and down completely randomly.
Pair Corralation between Samsung Electronics and IDEXX Laboratories
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.95 times more return on investment than IDEXX Laboratories. However, Samsung Electronics Co is 1.06 times less risky than IDEXX Laboratories. It trades about 0.09 of its potential returns per unit of risk. IDEXX Laboratories is currently generating about 0.02 per unit of risk. If you would invest 90,450 in Samsung Electronics Co on December 30, 2024 and sell it today you would earn a total of 10,050 from holding Samsung Electronics Co or generate 11.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. IDEXX Laboratories
Performance |
Timeline |
Samsung Electronics |
IDEXX Laboratories |
Samsung Electronics and IDEXX Laboratories Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and IDEXX Laboratories
The main advantage of trading using opposite Samsung Electronics and IDEXX Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, IDEXX Laboratories 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 IDEXX Laboratories will offset losses from the drop in IDEXX Laboratories' 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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