Correlation Between Physiomics Plc and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Physiomics 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 Physiomics 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 Physiomics Plc and Samsung Electronics Co, you can compare the effects of market volatilities on Physiomics 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 Physiomics Plc with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Physiomics Plc and Samsung Electronics.
Diversification Opportunities for Physiomics Plc and Samsung Electronics
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Physiomics and Samsung is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Physiomics 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 Physiomics 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 Physiomics 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 Physiomics Plc i.e., Physiomics Plc and Samsung Electronics go up and down completely randomly.
Pair Corralation between Physiomics Plc and Samsung Electronics
Assuming the 90 days trading horizon Physiomics Plc is expected to generate 1.85 times more return on investment than Samsung Electronics. However, Physiomics Plc is 1.85 times more volatile than Samsung Electronics Co. It trades about 0.04 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.18 per unit of risk. If you would invest 68.00 in Physiomics Plc on September 21, 2024 and sell it today you would earn a total of 7.00 from holding Physiomics Plc or generate 10.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Physiomics Plc vs. Samsung Electronics Co
Performance |
| Timeline |
| Physiomics Plc |
| Samsung Electronics |
Physiomics Plc and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Physiomics Plc and Samsung Electronics
The main advantage of trading using opposite Physiomics Plc and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Physiomics 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.| Physiomics Plc vs. Samsung Electronics Co | Physiomics Plc vs. Samsung Electronics Co | Physiomics Plc vs. Hyundai Motor | Physiomics Plc vs. Toyota Motor Corp |
| Samsung Electronics vs. International Consolidated Airlines | Samsung Electronics vs. American Homes 4 | Samsung Electronics vs. Axfood AB | Samsung Electronics vs. Fortune Brands Home |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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