Correlation Between Samsung Electronics and SPDR Series
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and SPDR Series 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 SPDR Series 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 SPDR Series Trust, you can compare the effects of market volatilities on Samsung Electronics and SPDR Series 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 SPDR Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and SPDR Series.
Diversification Opportunities for Samsung Electronics and SPDR Series
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and SPDR is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and SPDR Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Series Trust 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 SPDR Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Series Trust has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and SPDR Series go up and down completely randomly.
Pair Corralation between Samsung Electronics and SPDR Series
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the SPDR Series. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.17 times less risky than SPDR Series. The stock trades about -0.09 of its potential returns per unit of risk. The SPDR Series Trust is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 267,142 in SPDR Series Trust on October 22, 2024 and sell it today you would earn a total of 39,877 from holding SPDR Series Trust or generate 14.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. SPDR Series Trust
Performance |
Timeline |
Samsung Electronics |
SPDR Series Trust |
Samsung Electronics and SPDR Series Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and SPDR Series
The main advantage of trading using opposite Samsung Electronics and SPDR Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, SPDR Series 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 SPDR Series will offset losses from the drop in SPDR Series' long position.Samsung Electronics vs. Deutsche Bank Aktiengesellschaft | Samsung Electronics vs. First Majestic Silver | Samsung Electronics vs. Verizon Communications | Samsung Electronics vs. DXC Technology |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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