Correlation Between ARISTOCRAT LEISURE and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARISTOCRAT LEISURE and Samsung Electronics Co, you can compare the effects of market volatilities on ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARISTOCRAT LEISURE and Samsung Electronics.
Diversification Opportunities for ARISTOCRAT LEISURE and Samsung Electronics
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ARISTOCRAT and Samsung is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding ARISTOCRAT LEISURE and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE i.e., ARISTOCRAT LEISURE and Samsung Electronics go up and down completely randomly.
Pair Corralation between ARISTOCRAT LEISURE and Samsung Electronics
Assuming the 90 days trading horizon ARISTOCRAT LEISURE is expected to generate 0.57 times more return on investment than Samsung Electronics. However, ARISTOCRAT LEISURE is 1.75 times less risky than Samsung Electronics. It trades about 0.13 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.0 per unit of risk. If you would invest 2,111 in ARISTOCRAT LEISURE on September 4, 2024 and sell it today you would earn a total of 2,029 from holding ARISTOCRAT LEISURE or generate 96.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARISTOCRAT LEISURE vs. Samsung Electronics Co
Performance |
| Timeline |
| ARISTOCRAT LEISURE |
| Samsung Electronics |
ARISTOCRAT LEISURE and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARISTOCRAT LEISURE and Samsung Electronics
The main advantage of trading using opposite ARISTOCRAT LEISURE and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARISTOCRAT LEISURE 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.| ARISTOCRAT LEISURE vs. TOTAL GABON | ARISTOCRAT LEISURE vs. Walgreens Boots Alliance | ARISTOCRAT LEISURE vs. Peak Resources Limited |
| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Xiaomi | Samsung Electronics vs. Panasonic Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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