Correlation Between DFS Furniture and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both DFS Furniture 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 DFS Furniture and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and Samsung Electronics Co, you can compare the effects of market volatilities on DFS Furniture 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 DFS Furniture with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Samsung Electronics.
Diversification Opportunities for DFS Furniture and Samsung Electronics
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DFS and Samsung is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture 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 DFS Furniture 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 DFS Furniture 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 DFS Furniture i.e., DFS Furniture and Samsung Electronics go up and down completely randomly.
Pair Corralation between DFS Furniture and Samsung Electronics
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 1.34 times more return on investment than Samsung Electronics. However, DFS Furniture is 1.34 times more volatile than Samsung Electronics Co. It trades about 0.0 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.03 per unit of risk. If you would invest 14,350 in DFS Furniture PLC on October 28, 2024 and sell it today you would lose (950.00) from holding DFS Furniture PLC or give up 6.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. Samsung Electronics Co
Performance |
| Timeline |
| DFS Furniture PLC |
| Samsung Electronics |
DFS Furniture and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Samsung Electronics
The main advantage of trading using opposite DFS Furniture and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture 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.| DFS Furniture vs. Impax Asset Management | DFS Furniture vs. Software Circle plc | DFS Furniture vs. Eastman Chemical Co | DFS Furniture vs. Auction Technology Group |
| Samsung Electronics vs. Canadian General Investments | Samsung Electronics vs. Spotify Technology SA | Samsung Electronics vs. Raytheon Technologies Corp | Samsung Electronics vs. Polar Capital Technology |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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