Correlation Between Rockfire Resources and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Rockfire Resources 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 Rockfire Resources and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rockfire Resources plc and Samsung Electronics Co, you can compare the effects of market volatilities on Rockfire Resources 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 Rockfire Resources with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockfire Resources and Samsung Electronics.
Diversification Opportunities for Rockfire Resources and Samsung Electronics
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rockfire and Samsung is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Rockfire Resources 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 Rockfire Resources 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 Rockfire Resources 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 Rockfire Resources i.e., Rockfire Resources and Samsung Electronics go up and down completely randomly.
Pair Corralation between Rockfire Resources and Samsung Electronics
Assuming the 90 days trading horizon Rockfire Resources plc is expected to generate 10.88 times more return on investment than Samsung Electronics. However, Rockfire Resources is 10.88 times more volatile than Samsung Electronics Co. It trades about 0.18 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.1 per unit of risk. If you would invest 11.00 in Rockfire Resources plc on September 17, 2024 and sell it today you would earn a total of 7.00 from holding Rockfire Resources plc or generate 63.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Rockfire Resources plc vs. Samsung Electronics Co
Performance |
| Timeline |
| Rockfire Resources plc |
| Samsung Electronics |
Rockfire Resources and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rockfire Resources and Samsung Electronics
The main advantage of trading using opposite Rockfire Resources and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockfire Resources 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.| Rockfire Resources vs. Samsung Electronics Co | Rockfire Resources vs. Elmos Semiconductor SE | Rockfire Resources vs. Anglesey Mining | Rockfire Resources vs. AfriTin Mining |
| Samsung Electronics vs. Rockfire Resources plc | Samsung Electronics vs. Tlou Energy | Samsung Electronics vs. Ikigai Ventures | Samsung Electronics vs. Falcon Oil Gas |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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