Correlation Between Samsung Electronics and Prosiebensat

Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Prosiebensat 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 Prosiebensat 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 Prosiebensat 1 Media, you can compare the effects of market volatilities on Samsung Electronics and Prosiebensat 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 Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Prosiebensat.

Diversification Opportunities for Samsung Electronics and Prosiebensat

0.45

Correlation Coefficient

Samsung Electronics  Prosiebensat

Very weak diversification

The 3 months correlation between Samsung and Prosiebensat is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Prosiebensat 1 Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosiebensat 1 Media 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 Prosiebensat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosiebensat 1 Media has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Prosiebensat go up and down completely randomly.

Pair Corralation between Samsung Electronics and Prosiebensat

Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Prosiebensat. In addition to that, Samsung Electronics is 1.04 times more volatile than Prosiebensat 1 Media. It trades about -0.2 of its total potential returns per unit of risk. Prosiebensat 1 Media is currently generating about -0.12 per unit of volatility. If you would invest  561.00  in Prosiebensat 1 Media on September 4, 2024 and sell it today you would lose (89.00) from holding Prosiebensat 1 Media or give up 15.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Samsung Electronics Co  vs.  Prosiebensat 1 Media

Samsung Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samsung Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Prosiebensat 1 Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prosiebensat 1 Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Samsung Electronics and Prosiebensat

The main advantage of trading using opposite Samsung Electronics and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Prosiebensat 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 Prosiebensat will offset losses from the drop in Prosiebensat's long position.

The idea behind Samsung Electronics Co and Prosiebensat 1 Media pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.