Correlation Between Walmart and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Walmart 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 Walmart and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Samsung Electronics Co, you can compare the effects of market volatilities on Walmart 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 Walmart with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Samsung Electronics.
Diversification Opportunities for Walmart and Samsung Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Samsung is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Walmart 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 Walmart 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 Walmart i.e., Walmart and Samsung Electronics go up and down completely randomly.
Pair Corralation between Walmart and Samsung Electronics
Assuming the 90 days trading horizon Walmart is expected to generate 9.86 times more return on investment than Samsung Electronics. However, Walmart is 9.86 times more volatile than Samsung Electronics Co. It trades about 0.05 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 4,343 in Walmart on August 30, 2024 and sell it today you would earn a total of 1,617 from holding Walmart or generate 37.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Walmart vs. Samsung Electronics Co
Performance |
| Timeline |
| Walmart |
| Samsung Electronics |
Walmart and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Samsung Electronics
The main advantage of trading using opposite Walmart and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart 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.| Walmart vs. Lendinvest PLC | Walmart vs. Neometals | Walmart vs. Albion Technology General | Walmart vs. Jupiter Fund Management |
| Samsung Electronics vs. Ondine Biomedical | Samsung Electronics vs. Europa Metals | Samsung Electronics vs. Lendinvest PLC | Samsung Electronics vs. Neometals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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