Correlation Between Sage Group and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Sage Group 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 Sage Group and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sage Group PLC and Samsung Electronics Co, you can compare the effects of market volatilities on Sage Group 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 Sage Group with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sage Group and Samsung Electronics.
Diversification Opportunities for Sage Group and Samsung Electronics
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sage and Samsung is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sage Group 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 Sage Group 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 Sage Group 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 Sage Group i.e., Sage Group and Samsung Electronics go up and down completely randomly.
Pair Corralation between Sage Group and Samsung Electronics
Assuming the 90 days trading horizon Sage Group PLC is expected to generate 0.45 times more return on investment than Samsung Electronics. However, Sage Group PLC is 2.2 times less risky than Samsung Electronics. It trades about -0.02 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.42 per unit of risk. If you would invest 129,500 in Sage Group PLC on September 24, 2024 and sell it today you would lose (500.00) from holding Sage Group PLC or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sage Group PLC vs. Samsung Electronics Co
Performance |
| Timeline |
| Sage Group PLC |
| Samsung Electronics |
Sage Group and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sage Group and Samsung Electronics
The main advantage of trading using opposite Sage Group and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sage Group 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.| Sage Group vs. Samsung Electronics Co | Sage Group vs. Samsung Electronics Co | Sage Group vs. Hyundai Motor | Sage Group vs. Toyota Motor Corp |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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