Correlation Between VIVA WINE and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both VIVA WINE 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 VIVA WINE and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIVA WINE GROUP and Samsung Electronics Co, you can compare the effects of market volatilities on VIVA WINE 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 VIVA WINE with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and Samsung Electronics.
Diversification Opportunities for VIVA WINE and Samsung Electronics
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VIVA and Samsung is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and VIVA WINE 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 VIVA WINE GROUP 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 VIVA WINE i.e., VIVA WINE and Samsung Electronics go up and down completely randomly.
Pair Corralation between VIVA WINE and Samsung Electronics
Assuming the 90 days horizon VIVA WINE is expected to generate 1.01 times less return on investment than Samsung Electronics. But when comparing it to its historical volatility, VIVA WINE GROUP is 1.05 times less risky than Samsung Electronics. It trades about 0.24 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 86,600 in Samsung Electronics Co on November 29, 2024 and sell it today you would earn a total of 7,800 from holding Samsung Electronics Co or generate 9.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
VIVA WINE GROUP vs. Samsung Electronics Co
Performance |
| Timeline |
| VIVA WINE GROUP |
| Samsung Electronics |
VIVA WINE and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIVA WINE and Samsung Electronics
The main advantage of trading using opposite VIVA WINE and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE 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.| VIVA WINE vs. Nufarm Limited | VIVA WINE vs. Indutrade AB | VIVA WINE vs. TRADELINK ELECTRON | VIVA WINE vs. Japan Medical Dynamic |
| Samsung Electronics vs. PENN Entertainment | Samsung Electronics vs. SQUIRREL MEDIA SA | Samsung Electronics vs. Daito Trust Construction | Samsung Electronics vs. ZINC MEDIA GR |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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