Correlation Between Stanley Black and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Stanley Black 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 Stanley Black and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stanley Black Decker and Samsung Electronics Co, you can compare the effects of market volatilities on Stanley Black 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 Stanley Black with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stanley Black and Samsung Electronics.
Diversification Opportunities for Stanley Black and Samsung Electronics
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Stanley and Samsung is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Stanley Black Decker and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Stanley Black 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 Stanley Black Decker 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 Stanley Black i.e., Stanley Black and Samsung Electronics go up and down completely randomly.
Pair Corralation between Stanley Black and Samsung Electronics
Assuming the 90 days trading horizon Stanley Black Decker is expected to generate 1.11 times more return on investment than Samsung Electronics. However, Stanley Black is 1.11 times more volatile than Samsung Electronics Co. It trades about 0.02 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.01 per unit of risk. If you would invest 7,422 in Stanley Black Decker on December 4, 2024 and sell it today you would earn a total of 788.00 from holding Stanley Black Decker or generate 10.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.19% |
| Values | Daily Returns |
Stanley Black Decker vs. Samsung Electronics Co
Performance |
| Timeline |
| Stanley Black Decker |
| Samsung Electronics |
Stanley Black and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stanley Black and Samsung Electronics
The main advantage of trading using opposite Stanley Black and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stanley Black 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.| Stanley Black vs. Ecclesiastical Insurance Office | Stanley Black vs. Induction Healthcare Group | Stanley Black vs. CVS Health Corp | Stanley Black vs. Spire Healthcare Group |
| Samsung Electronics vs. Silvercorp Metals | Samsung Electronics vs. Direct Line Insurance | Samsung Electronics vs. Liechtensteinische Landesbank AG | Samsung Electronics vs. Critical Metals Plc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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