Correlation Between GlobalData PLC and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both GlobalData PLC 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 GlobalData PLC and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalData PLC and Samsung Electronics Co, you can compare the effects of market volatilities on GlobalData PLC 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 GlobalData PLC with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalData PLC and Samsung Electronics.
Diversification Opportunities for GlobalData PLC and Samsung Electronics
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GlobalData and Samsung is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding GlobalData PLC and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and GlobalData PLC 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 GlobalData PLC 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 GlobalData PLC i.e., GlobalData PLC and Samsung Electronics go up and down completely randomly.
Pair Corralation between GlobalData PLC and Samsung Electronics
Assuming the 90 days trading horizon GlobalData PLC is expected to under-perform the Samsung Electronics. But the stock apears to be less risky and, when comparing its historical volatility, GlobalData PLC is 1.43 times less risky than Samsung Electronics. The stock trades about -0.15 of its potential returns per unit of risk. The Samsung Electronics Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 79,500 in Samsung Electronics Co on September 13, 2024 and sell it today you would earn a total of 1,700 from holding Samsung Electronics Co or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlobalData PLC vs. Samsung Electronics Co
Performance |
| Timeline |
| GlobalData PLC |
| Samsung Electronics |
GlobalData PLC and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalData PLC and Samsung Electronics
The main advantage of trading using opposite GlobalData PLC and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalData PLC 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.| GlobalData PLC vs. Samsung Electronics Co | GlobalData PLC vs. Samsung Electronics Co | GlobalData PLC vs. Hyundai Motor | GlobalData PLC vs. Toyota Motor Corp |
| Samsung Electronics vs. Rockfire Resources plc | Samsung Electronics vs. Tlou Energy | Samsung Electronics vs. Ikigai Ventures | Samsung Electronics vs. Falcon Oil Gas |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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