Correlation Between Burford Capital and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Burford Capital 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 Burford Capital and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burford Capital Limited and Samsung Electronics Co, you can compare the effects of market volatilities on Burford Capital 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 Burford Capital with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burford Capital and Samsung Electronics.
Diversification Opportunities for Burford Capital and Samsung Electronics
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Burford and Samsung is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Burford Capital Limited and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Burford Capital 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 Burford Capital Limited 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 Burford Capital i.e., Burford Capital and Samsung Electronics go up and down completely randomly.
Pair Corralation between Burford Capital and Samsung Electronics
Assuming the 90 days trading horizon Burford Capital Limited is expected to generate 0.59 times more return on investment than Samsung Electronics. However, Burford Capital Limited is 1.69 times less risky than Samsung Electronics. It trades about 0.14 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 104,674 in Burford Capital Limited on August 27, 2024 and sell it today you would earn a total of 4,926 from holding Burford Capital Limited or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burford Capital Limited vs. Samsung Electronics Co
Performance |
| Timeline |
| Burford Capital |
| Samsung Electronics |
Burford Capital and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burford Capital and Samsung Electronics
The main advantage of trading using opposite Burford Capital and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burford Capital 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.| Burford Capital vs. Catalyst Media Group | Burford Capital vs. Oncimmune Holdings plc | Burford Capital vs. Invesco Health Care | Burford Capital vs. Coor Service Management |
| Samsung Electronics vs. Royal Bank of | Samsung Electronics vs. Cembra Money Bank | Samsung Electronics vs. MT Bank Corp | Samsung Electronics vs. St Galler Kantonalbank |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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