Correlation Between Silver Bullet and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Silver Bullet 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 Silver Bullet and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silver Bullet Data and Samsung Electronics Co, you can compare the effects of market volatilities on Silver Bullet 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 Silver Bullet with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Bullet and Samsung Electronics.
Diversification Opportunities for Silver Bullet and Samsung Electronics
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Silver and Samsung is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Silver Bullet Data and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Silver Bullet 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 Silver Bullet Data 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 Silver Bullet i.e., Silver Bullet and Samsung Electronics go up and down completely randomly.
Pair Corralation between Silver Bullet and Samsung Electronics
Assuming the 90 days trading horizon Silver Bullet Data is expected to generate 1.98 times more return on investment than Samsung Electronics. However, Silver Bullet is 1.98 times more volatile than Samsung Electronics Co. It trades about 0.11 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.15 per unit of risk. If you would invest 4,850 in Silver Bullet Data on September 24, 2024 and sell it today you would earn a total of 1,400 from holding Silver Bullet Data or generate 28.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.48% |
Values | Daily Returns |
Silver Bullet Data vs. Samsung Electronics Co
Performance |
Timeline |
Silver Bullet Data |
Samsung Electronics |
Silver Bullet and Samsung Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Silver Bullet and Samsung Electronics
The main advantage of trading using opposite Silver Bullet and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silver Bullet 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.Silver Bullet vs. Samsung Electronics Co | Silver Bullet vs. Samsung Electronics Co | Silver Bullet vs. Toyota Motor Corp | Silver Bullet vs. Hon Hai Precision |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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