Correlation Between Roper Technologies and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Roper Technologies 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 Roper Technologies and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roper Technologies and Samsung Electronics Co, you can compare the effects of market volatilities on Roper Technologies 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 Roper Technologies with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roper Technologies and Samsung Electronics.
Diversification Opportunities for Roper Technologies and Samsung Electronics
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Roper and Samsung is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Roper Technologies and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Roper Technologies 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 Roper Technologies 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 Roper Technologies i.e., Roper Technologies and Samsung Electronics go up and down completely randomly.
Pair Corralation between Roper Technologies and Samsung Electronics
Assuming the 90 days trading horizon Roper Technologies is expected to generate 3.82 times more return on investment than Samsung Electronics. However, Roper Technologies is 3.82 times more volatile than Samsung Electronics Co. It trades about 0.03 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.04 per unit of risk. If you would invest 44,708 in Roper Technologies on August 31, 2024 and sell it today you would earn a total of 12,055 from holding Roper Technologies or generate 26.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.94% |
| Values | Daily Returns |
Roper Technologies vs. Samsung Electronics Co
Performance |
| Timeline |
| Roper Technologies |
| Samsung Electronics |
Roper Technologies and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roper Technologies and Samsung Electronics
The main advantage of trading using opposite Roper Technologies and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roper Technologies 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.| Roper Technologies vs. Tata Steel Limited | Roper Technologies vs. Wizz Air Holdings | Roper Technologies vs. Westlake Chemical Corp | Roper Technologies vs. Fair Oaks Income |
| Samsung Electronics vs. Kaufman Et Broad | Samsung Electronics vs. Allianz Technology Trust | Samsung Electronics vs. Monster Beverage Corp | Samsung Electronics vs. Gaztransport et Technigaz |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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