Correlation Between Samsung Electronics and Retail Estates
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Retail Estates 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 Retail Estates 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 Retail Estates NV, you can compare the effects of market volatilities on Samsung Electronics and Retail Estates 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 Retail Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Retail Estates.
Diversification Opportunities for Samsung Electronics and Retail Estates
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and Retail is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Retail Estates NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Estates NV 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 Retail Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Estates NV has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Retail Estates go up and down completely randomly.
Pair Corralation between Samsung Electronics and Retail Estates
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Retail Estates. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.98 times less risky than Retail Estates. The stock trades about -0.02 of its potential returns per unit of risk. The Retail Estates NV is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,949 in Retail Estates NV on August 26, 2024 and sell it today you would earn a total of 1,261 from holding Retail Estates NV or generate 21.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.99% |
| Values | Daily Returns |
Samsung Electronics Co vs. Retail Estates NV
Performance |
| Timeline |
| Samsung Electronics |
| Retail Estates NV |
Samsung Electronics and Retail Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Retail Estates
The main advantage of trading using opposite Samsung Electronics and Retail Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Retail Estates 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 Retail Estates will offset losses from the drop in Retail Estates' 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 |
| Retail Estates vs. Samsung Electronics Co | Retail Estates vs. Samsung Electronics Co | Retail Estates vs. Hyundai Motor | Retail Estates 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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