Correlation Between Samsung Electronics and Mereo BioPharma
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Mereo BioPharma 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 Samsung Electronics and Mereo BioPharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Mereo BioPharma Group, you can compare the effects of market volatilities on Samsung Electronics and Mereo BioPharma 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 Samsung Electronics with a short position of Mereo BioPharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Mereo BioPharma.
Diversification Opportunities for Samsung Electronics and Mereo BioPharma
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Mereo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Mereo BioPharma Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mereo BioPharma Group and Samsung Electronics 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 Samsung Electronics Co are associated (or correlated) with Mereo BioPharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mereo BioPharma Group has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Mereo BioPharma go up and down completely randomly.
Pair Corralation between Samsung Electronics and Mereo BioPharma
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Mereo BioPharma. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.69 times less risky than Mereo BioPharma. The stock trades about -0.13 of its potential returns per unit of risk. The Mereo BioPharma Group is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 403.00 in Mereo BioPharma Group on August 25, 2024 and sell it today you would lose (31.00) from holding Mereo BioPharma Group or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Mereo BioPharma Group
Performance |
| Timeline |
| Samsung Electronics |
| Mereo BioPharma Group |
Samsung Electronics and Mereo BioPharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Mereo BioPharma
The main advantage of trading using opposite Samsung Electronics and Mereo BioPharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Mereo BioPharma 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 Mereo BioPharma will offset losses from the drop in Mereo BioPharma's long position.| Samsung Electronics vs. Toyota Motor Corp | Samsung Electronics vs. SoftBank Group Corp | Samsung Electronics vs. OTP Bank Nyrt | Samsung Electronics vs. Las Vegas Sands |
| Mereo BioPharma vs. Samsung Electronics Co | Mereo BioPharma vs. Samsung Electronics Co | Mereo BioPharma vs. Hyundai Motor | Mereo BioPharma vs. Toyota Motor Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |