Correlation Between Freeport McMoran and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Freeport McMoran 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 Freeport McMoran and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freeport McMoran Copper Gold and Samsung Electronics Co, you can compare the effects of market volatilities on Freeport McMoran 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 Freeport McMoran with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freeport McMoran and Samsung Electronics.
Diversification Opportunities for Freeport McMoran and Samsung Electronics
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Freeport and Samsung is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Freeport McMoran Copper Gold and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Freeport McMoran 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 Freeport McMoran Copper Gold 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 Freeport McMoran i.e., Freeport McMoran and Samsung Electronics go up and down completely randomly.
Pair Corralation between Freeport McMoran and Samsung Electronics
Considering the 90-day investment horizon Freeport McMoran Copper Gold is expected to generate 1.21 times more return on investment than Samsung Electronics. However, Freeport McMoran is 1.21 times more volatile than Samsung Electronics Co. It trades about 0.26 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.05 per unit of risk. If you would invest 3,770 in Freeport McMoran Copper Gold on February 29, 2024 and sell it today you would earn a total of 1,593 from holding Freeport McMoran Copper Gold or generate 42.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.39% |
Values | Daily Returns |
Freeport McMoran Copper Gold vs. Samsung Electronics Co
Performance |
Timeline |
Freeport McMoran Copper |
Samsung Electronics |
Freeport McMoran and Samsung Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Freeport McMoran and Samsung Electronics
The main advantage of trading using opposite Freeport McMoran and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freeport McMoran 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.Freeport McMoran vs. Agnico Eagle Mines | Freeport McMoran vs. Pan American Silver | Freeport McMoran vs. Wheaton Precious Metals | Freeport McMoran vs. Newmont Goldcorp Corp |
Samsung Electronics vs. Sony Group Corp | Samsung Electronics vs. CITIUS RESOURCES LS 005 | Samsung Electronics vs. SIVERS SEMICONDUCTORS AB | Samsung Electronics vs. NorAm Drilling AS |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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