Correlation Between Samsung Electronics and Morgan Advanced
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Morgan Advanced 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 Morgan Advanced 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 Morgan Advanced Materials, you can compare the effects of market volatilities on Samsung Electronics and Morgan Advanced 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 Morgan Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Morgan Advanced.
Diversification Opportunities for Samsung Electronics and Morgan Advanced
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Morgan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Morgan Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Advanced Materials 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 Morgan Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Advanced Materials has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Morgan Advanced go up and down completely randomly.
Pair Corralation between Samsung Electronics and Morgan Advanced
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Morgan Advanced. In addition to that, Samsung Electronics is 1.39 times more volatile than Morgan Advanced Materials. It trades about -0.1 of its total potential returns per unit of risk. Morgan Advanced Materials is currently generating about -0.07 per unit of volatility. If you would invest 30,939 in Morgan Advanced Materials on August 31, 2024 and sell it today you would lose (4,389) from holding Morgan Advanced Materials or give up 14.19% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. Morgan Advanced Materials
Performance |
Timeline |
Samsung Electronics |
Morgan Advanced Materials |
Samsung Electronics and Morgan Advanced Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and Morgan Advanced
The main advantage of trading using opposite Samsung Electronics and Morgan Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Morgan Advanced 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 Morgan Advanced will offset losses from the drop in Morgan Advanced's long position.Samsung Electronics vs. The Investment | Samsung Electronics vs. Kinnevik Investment AB | Samsung Electronics vs. The Mercantile Investment | Samsung Electronics vs. Smithson Investment Trust |
Morgan Advanced vs. Neometals | Morgan Advanced vs. Coor Service Management | Morgan Advanced vs. Aeorema Communications Plc | Morgan Advanced vs. JLEN Environmental Assets |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |