Correlation Between Samsung Electronics and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS, you can compare the effects of market volatilities on Samsung Electronics and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and AIR PRODCHEMICALS.
Diversification Opportunities for Samsung Electronics and AIR PRODCHEMICALS
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and AIR is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between Samsung Electronics and AIR PRODCHEMICALS
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the AIR PRODCHEMICALS. In addition to that, Samsung Electronics is 1.65 times more volatile than AIR PRODCHEMICALS. It trades about -0.09 of its total potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about 0.09 per unit of volatility. If you would invest 25,960 in AIR PRODCHEMICALS on October 4, 2024 and sell it today you would earn a total of 2,080 from holding AIR PRODCHEMICALS or generate 8.01% 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. AIR PRODCHEMICALS
Performance |
Timeline |
Samsung Electronics |
AIR PRODCHEMICALS |
Samsung Electronics and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and AIR PRODCHEMICALS
The main advantage of trading using opposite Samsung Electronics and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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