Correlation Between Samsung Electronics and Axway Software
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Axway Software 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 Axway Software 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 Axway Software SA, you can compare the effects of market volatilities on Samsung Electronics and Axway Software 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 Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Axway Software.
Diversification Opportunities for Samsung Electronics and Axway Software
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Axway is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Axway Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axway Software SA 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 Axway Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axway Software SA has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Axway Software go up and down completely randomly.
Pair Corralation between Samsung Electronics and Axway Software
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 7.85 times more return on investment than Axway Software. However, Samsung Electronics is 7.85 times more volatile than Axway Software SA. It trades about 0.12 of its potential returns per unit of risk. Axway Software SA is currently generating about 0.0 per unit of risk. If you would invest 89,800 in Samsung Electronics Co on September 15, 2024 and sell it today you would earn a total of 6,650 from holding Samsung Electronics Co or generate 7.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Samsung Electronics Co vs. Axway Software SA
Performance |
Timeline |
Samsung Electronics |
Axway Software SA |
Samsung Electronics and Axway Software Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and Axway Software
The main advantage of trading using opposite Samsung Electronics and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Axway Software 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 Axway Software will offset losses from the drop in Axway Software's long position.Samsung Electronics vs. Zegona Communications Plc | Samsung Electronics vs. Universal Health Services | Samsung Electronics vs. Omega Healthcare Investors | Samsung Electronics vs. Orient Telecoms |
Axway Software vs. Samsung Electronics Co | Axway Software vs. Samsung Electronics Co | Axway Software vs. Hyundai Motor | Axway Software vs. Reliance Industries Ltd |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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