Correlation Between Samsung Electronics and Lowe Cos
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Lowe Cos 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 Lowe Cos 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 Lowe Cos, you can compare the effects of market volatilities on Samsung Electronics and Lowe Cos 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 Lowe Cos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Lowe Cos.
Diversification Opportunities for Samsung Electronics and Lowe Cos
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Lowe is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Lowe Cos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowe Cos 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 Lowe Cos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowe Cos has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Lowe Cos go up and down completely randomly.
Pair Corralation between Samsung Electronics and Lowe Cos
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Lowe Cos. In addition to that, Samsung Electronics is 1.32 times more volatile than Lowe Cos. It trades about -0.06 of its total potential returns per unit of risk. Lowe Cos is currently generating about 0.06 per unit of volatility. If you would invest 22,164 in Lowe Cos on September 14, 2024 and sell it today you would earn a total of 4,258 from holding Lowe Cos or generate 19.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Samsung Electronics Co vs. Lowe Cos
Performance |
| Timeline |
| Samsung Electronics |
| Lowe Cos |
Samsung Electronics and Lowe Cos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Lowe Cos
The main advantage of trading using opposite Samsung Electronics and Lowe Cos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Lowe Cos 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 Lowe Cos will offset losses from the drop in Lowe Cos' long position.| Samsung Electronics vs. Rockfire Resources plc | Samsung Electronics vs. Tlou Energy | Samsung Electronics vs. Ikigai Ventures | Samsung Electronics vs. Falcon Oil Gas |
| Lowe Cos vs. Samsung Electronics Co | Lowe Cos vs. Samsung Electronics Co | Lowe Cos vs. Hyundai Motor | Lowe Cos vs. Reliance Industries Ltd |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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