Correlation Between Samsung Electronics and Zhejiang Expressway
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Zhejiang Expressway 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 Zhejiang Expressway 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 Zhejiang Expressway Co, you can compare the effects of market volatilities on Samsung Electronics and Zhejiang Expressway 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 Zhejiang Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Zhejiang Expressway.
Diversification Opportunities for Samsung Electronics and Zhejiang Expressway
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Zhejiang is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Zhejiang Expressway Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Expressway 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 Zhejiang Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Expressway has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Zhejiang Expressway go up and down completely randomly.
Pair Corralation between Samsung Electronics and Zhejiang Expressway
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Zhejiang Expressway. In addition to that, Samsung Electronics is 1.84 times more volatile than Zhejiang Expressway Co. It trades about -0.01 of its total potential returns per unit of risk. Zhejiang Expressway Co is currently generating about 0.06 per unit of volatility. If you would invest 59.00 in Zhejiang Expressway Co on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Zhejiang Expressway Co or generate 1.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. Zhejiang Expressway Co
Performance |
Timeline |
Samsung Electronics |
Zhejiang Expressway |
Samsung Electronics and Zhejiang Expressway Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and Zhejiang Expressway
The main advantage of trading using opposite Samsung Electronics and Zhejiang Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Zhejiang Expressway 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 Zhejiang Expressway will offset losses from the drop in Zhejiang Expressway's long position.Samsung Electronics vs. Chiba Bank | Samsung Electronics vs. VULCAN MATERIALS | Samsung Electronics vs. Compagnie Plastic Omnium | Samsung Electronics vs. Rayonier Advanced Materials |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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