Correlation Between Samsung Electronics and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and NYSE Composite 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 NYSE Composite 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 NYSE Composite, you can compare the effects of market volatilities on Samsung Electronics and NYSE Composite 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 NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and NYSE Composite.
Diversification Opportunities for Samsung Electronics and NYSE Composite
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and NYSE is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite 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 NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and NYSE Composite go up and down completely randomly.
Pair Corralation between Samsung Electronics and NYSE Composite
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the NYSE Composite. In addition to that, Samsung Electronics is 3.56 times more volatile than NYSE Composite. It trades about -0.05 of its total potential returns per unit of risk. NYSE Composite is currently generating about -0.06 per unit of volatility. If you would invest 1,813,395 in NYSE Composite on March 12, 2024 and sell it today you would lose (14,832) from holding NYSE Composite or give up 0.82% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Samsung Electronics Co vs. NYSE Composite
Performance |
Timeline |
Samsung Electronics and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Samsung Electronics Co
Pair trading matchups for Samsung Electronics
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Samsung Electronics and NYSE Composite
The main advantage of trading using opposite Samsung Electronics and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Samsung Electronics vs. DETALION GAMES SA | Samsung Electronics vs. SK TELECOM TDADR | Samsung Electronics vs. Games Workshop Group | Samsung Electronics vs. Media and Games |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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