Correlation Between Samsung Electronics and ResMed
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and ResMed 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 ResMed 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 ResMed Inc, you can compare the effects of market volatilities on Samsung Electronics and ResMed 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 ResMed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and ResMed.
Diversification Opportunities for Samsung Electronics and ResMed
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and ResMed is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and ResMed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ResMed Inc 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 ResMed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ResMed Inc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and ResMed go up and down completely randomly.
Pair Corralation between Samsung Electronics and ResMed
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 1.0 times less return on investment than ResMed. In addition to that, Samsung Electronics is 1.33 times more volatile than ResMed Inc. It trades about 0.15 of its total potential returns per unit of risk. ResMed Inc is currently generating about 0.2 per unit of volatility. If you would invest 18,501 in ResMed Inc on April 20, 2025 and sell it today you would earn a total of 3,729 from holding ResMed Inc or generate 20.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Samsung Electronics Co vs. ResMed Inc
Performance |
Timeline |
Samsung Electronics |
ResMed Inc |
Samsung Electronics and ResMed Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and ResMed
The main advantage of trading using opposite Samsung Electronics and ResMed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, ResMed 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 ResMed will offset losses from the drop in ResMed's long position.Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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