Correlation Between Barunson Entertainment and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Barunson Entertainment and Samsung Electronics 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 Barunson Entertainment and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barunson Entertainment Arts and Samsung Electronics Co, you can compare the effects of market volatilities on Barunson Entertainment and Samsung Electronics 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 Barunson Entertainment with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barunson Entertainment and Samsung Electronics.
Diversification Opportunities for Barunson Entertainment and Samsung Electronics
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barunson and Samsung is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Barunson Entertainment Arts and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Barunson Entertainment 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 Barunson Entertainment Arts are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Barunson Entertainment i.e., Barunson Entertainment and Samsung Electronics go up and down completely randomly.
Pair Corralation between Barunson Entertainment and Samsung Electronics
Assuming the 90 days trading horizon Barunson Entertainment Arts is expected to generate 1.17 times more return on investment than Samsung Electronics. However, Barunson Entertainment is 1.17 times more volatile than Samsung Electronics Co. It trades about -0.05 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.09 per unit of risk. If you would invest 49,500 in Barunson Entertainment Arts on September 25, 2024 and sell it today you would lose (5,100) from holding Barunson Entertainment Arts or give up 10.3% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Barunson Entertainment Arts vs. Samsung Electronics Co
Performance |
Timeline |
Barunson Entertainment |
Samsung Electronics |
Barunson Entertainment and Samsung Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Barunson Entertainment and Samsung Electronics
The main advantage of trading using opposite Barunson Entertainment and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barunson Entertainment position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.Barunson Entertainment vs. Hyundai Engineering Plastics | Barunson Entertainment vs. Lake Materials Co | Barunson Entertainment vs. RF Materials Co | Barunson Entertainment vs. Youngsin Metal Industrial |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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