Correlation Between Samsung Electronics and Catena Media
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Catena Media 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 Catena Media 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 Catena Media PLC, you can compare the effects of market volatilities on Samsung Electronics and Catena Media 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 Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Catena Media.
Diversification Opportunities for Samsung Electronics and Catena Media
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Samsung and Catena is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Catena Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena Media PLC 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 Catena Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena Media PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Catena Media go up and down completely randomly.
Pair Corralation between Samsung Electronics and Catena Media
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.52 times more return on investment than Catena Media. However, Samsung Electronics Co is 1.92 times less risky than Catena Media. It trades about -0.17 of its potential returns per unit of risk. Catena Media PLC is currently generating about -0.17 per unit of risk. If you would invest 121,559 in Samsung Electronics Co on September 12, 2024 and sell it today you would lose (29,409) from holding Samsung Electronics Co or give up 24.19% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. Catena Media PLC
Performance |
Timeline |
Samsung Electronics |
Catena Media PLC |
Samsung Electronics and Catena Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and Catena Media
The main advantage of trading using opposite Samsung Electronics and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Catena Media 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 Catena Media will offset losses from the drop in Catena Media's long position.Samsung Electronics vs. McEwen Mining | Samsung Electronics vs. United Utilities Group | Samsung Electronics vs. Coor Service Management | Samsung Electronics vs. Jupiter Fund Management |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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