Correlation Between Pets At and Samsung Electronics

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Can any of the company-specific risk be diversified away by investing in both Pets At 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 Pets At and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pets at Home and Samsung Electronics Co, you can compare the effects of market volatilities on Pets At 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 Pets At with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pets At and Samsung Electronics.

Diversification Opportunities for Pets At and Samsung Electronics

0.65
  Correlation Coefficient

Poor diversification

The 3 months correlation between Pets and Samsung is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pets at Home and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Pets At 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 Pets at Home 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 Pets At i.e., Pets At and Samsung Electronics go up and down completely randomly.

Pair Corralation between Pets At and Samsung Electronics

Assuming the 90 days trading horizon Pets at Home is expected to generate 1.14 times more return on investment than Samsung Electronics. However, Pets At is 1.14 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 -0.02 per unit of risk. If you would invest  25,486  in Pets at Home on September 12, 2024 and sell it today you would lose (2,266) from holding Pets at Home or give up 8.89% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Pets at Home  vs.  Samsung Electronics Co

 Performance 
       Timeline  
Pets at Home 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Pets at Home has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Samsung Electronics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Samsung Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pets At and Samsung Electronics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pets At and Samsung Electronics

The main advantage of trading using opposite Pets At and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pets At 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.
The idea behind Pets at Home and Samsung Electronics Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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