Correlation Between Samsung Electronics and Sony Corp
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sony Corp 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 Sony Corp 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 Sony Corp, you can compare the effects of market volatilities on Samsung Electronics and Sony Corp 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 Sony Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sony Corp.
Diversification Opportunities for Samsung Electronics and Sony Corp
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Sony is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sony Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Corp 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 Sony Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sony Corp go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sony Corp
Assuming the 90 days horizon Samsung Electronics is expected to generate 8.36 times less return on investment than Sony Corp. But when comparing it to its historical volatility, Samsung Electronics Co is 49.85 times less risky than Sony Corp. It trades about 0.13 of its potential returns per unit of risk. Sony Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,530 in Sony Corp on May 7, 2025 and sell it today you would earn a total of 3.00 from holding Sony Corp or generate 0.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.39% |
Values | Daily Returns |
Samsung Electronics Co vs. Sony Corp
Performance |
Timeline |
Samsung Electronics |
Sony Corp |
Samsung Electronics and Sony Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and Sony Corp
The main advantage of trading using opposite Samsung Electronics and Sony Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sony Corp 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 Sony Corp will offset losses from the drop in Sony Corp's long position.Samsung Electronics vs. LG Display Co | Samsung Electronics vs. Sharp | Samsung Electronics vs. Xiaomi Corp | Samsung Electronics vs. TCL Electronics Holdings |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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