Correlation Between Samsung Electronics and Transurban
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Transurban 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 Transurban 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 Transurban Group, you can compare the effects of market volatilities on Samsung Electronics and Transurban 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 Transurban. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Transurban.
Diversification Opportunities for Samsung Electronics and Transurban
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and Transurban is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Transurban Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transurban Group 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 Transurban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transurban Group has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Transurban go up and down completely randomly.
Pair Corralation between Samsung Electronics and Transurban
Assuming the 90 days horizon Samsung Electronics is expected to generate 1.08 times less return on investment than Transurban. In addition to that, Samsung Electronics is 1.74 times more volatile than Transurban Group. It trades about 0.03 of its total potential returns per unit of risk. Transurban Group is currently generating about 0.05 per unit of volatility. If you would invest 753.00 in Transurban Group on December 3, 2024 and sell it today you would earn a total of 23.00 from holding Transurban Group or generate 3.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. Transurban Group
Performance |
Timeline |
Samsung Electronics |
Transurban Group |
Samsung Electronics and Transurban Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and Transurban
The main advantage of trading using opposite Samsung Electronics and Transurban positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Transurban 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 Transurban will offset losses from the drop in Transurban's long position.Samsung Electronics vs. Hemisphere Energy Corp | Samsung Electronics vs. TELECOM ITALRISP ADR10 | Samsung Electronics vs. Rocket Internet SE | Samsung Electronics vs. RYU Apparel |
Transurban vs. Hyster Yale Materials Handling | Transurban vs. Heidelberg Materials AG | Transurban vs. Goodyear Tire Rubber | Transurban vs. BII Railway Transportation |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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