Correlation Between Mitchells Butlers and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Mitchells Butlers 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 Mitchells Butlers and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitchells Butlers PLC and Samsung Electronics Co, you can compare the effects of market volatilities on Mitchells Butlers 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 Mitchells Butlers with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitchells Butlers and Samsung Electronics.
Diversification Opportunities for Mitchells Butlers and Samsung Electronics
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mitchells and Samsung is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Mitchells Butlers 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 Mitchells Butlers 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 Mitchells Butlers 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 Mitchells Butlers i.e., Mitchells Butlers and Samsung Electronics go up and down completely randomly.
Pair Corralation between Mitchells Butlers and Samsung Electronics
Assuming the 90 days trading horizon Mitchells Butlers PLC is expected to generate 0.45 times more return on investment than Samsung Electronics. However, Mitchells Butlers PLC is 2.25 times less risky than Samsung Electronics. It trades about 0.11 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.05 per unit of risk. If you would invest 23,500 in Mitchells Butlers PLC on September 12, 2024 and sell it today you would earn a total of 750.00 from holding Mitchells Butlers PLC or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mitchells Butlers PLC vs. Samsung Electronics Co
Performance |
| Timeline |
| Mitchells Butlers PLC |
| Samsung Electronics |
Mitchells Butlers and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitchells Butlers and Samsung Electronics
The main advantage of trading using opposite Mitchells Butlers and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitchells Butlers 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.| Mitchells Butlers vs. Zurich Insurance Group | Mitchells Butlers vs. Electronic Arts | Mitchells Butlers vs. Ecofin Global Utilities | Mitchells Butlers vs. United Internet AG |
| Samsung Electronics vs. Norwegian Air Shuttle | Samsung Electronics vs. GreenX Metals | Samsung Electronics vs. AMG Advanced Metallurgical | Samsung Electronics vs. Gaztransport et Technigaz |
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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