Correlation Between Samsung Electronics and SOLOCAL GROUP
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and SOLOCAL GROUP 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 SOLOCAL GROUP 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 SOLOCAL GROUP, you can compare the effects of market volatilities on Samsung Electronics and SOLOCAL GROUP 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 SOLOCAL GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and SOLOCAL GROUP.
Diversification Opportunities for Samsung Electronics and SOLOCAL GROUP
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and SOLOCAL is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and SOLOCAL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLOCAL 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 SOLOCAL GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOLOCAL GROUP has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and SOLOCAL GROUP go up and down completely randomly.
Pair Corralation between Samsung Electronics and SOLOCAL GROUP
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.47 times more return on investment than SOLOCAL GROUP. However, Samsung Electronics is 1.47 times more volatile than SOLOCAL GROUP. It trades about -0.29 of its potential returns per unit of risk. SOLOCAL GROUP is currently generating about -0.75 per unit of risk. If you would invest 83,400 in Samsung Electronics Co on September 26, 2024 and sell it today you would lose (10,000) from holding Samsung Electronics Co or give up 11.99% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. SOLOCAL GROUP
Performance |
Timeline |
Samsung Electronics |
SOLOCAL GROUP |
Samsung Electronics and SOLOCAL GROUP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and SOLOCAL GROUP
The main advantage of trading using opposite Samsung Electronics and SOLOCAL GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, SOLOCAL GROUP 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 SOLOCAL GROUP will offset losses from the drop in SOLOCAL GROUP's long position.Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Apple Inc |
SOLOCAL GROUP vs. Apple Inc | SOLOCAL GROUP vs. Apple Inc | SOLOCAL GROUP vs. Apple Inc | SOLOCAL GROUP vs. Apple Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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