Correlation Between Samsung Electronics and Align Technology
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Align Technology 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 Align Technology 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 Align Technology, you can compare the effects of market volatilities on Samsung Electronics and Align Technology 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 Align Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Align Technology.
Diversification Opportunities for Samsung Electronics and Align Technology
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Align is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology 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 Align Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Align Technology has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Align Technology go up and down completely randomly.
Pair Corralation between Samsung Electronics and Align Technology
Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.95 times more return on investment than Align Technology. However, Samsung Electronics Co is 1.06 times less risky than Align Technology. It trades about 0.0 of its potential returns per unit of risk. Align Technology is currently generating about -0.16 per unit of risk. If you would invest 92,000 in Samsung Electronics Co on December 2, 2024 and sell it today you would lose (1,600) from holding Samsung Electronics Co or give up 1.74% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. Align Technology
Performance |
Timeline |
Samsung Electronics |
Align Technology |
Samsung Electronics and Align Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and Align Technology
The main advantage of trading using opposite Samsung Electronics and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Align Technology 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 Align Technology will offset losses from the drop in Align Technology's long position.Samsung Electronics vs. Jacquet Metal Service | Samsung Electronics vs. GOLDQUEST MINING | Samsung Electronics vs. Tencent Music Entertainment | Samsung Electronics vs. LINMON MEDIA LTD |
Align Technology vs. DALATA HOTEL | Align Technology vs. LOANDEPOT INC A | Align Technology vs. InterContinental Hotels Group | Align Technology vs. GRENKELEASING Dusseldorf |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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