Correlation Between Samsung Electronics and Seche Environnement
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Seche Environnement 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 Seche Environnement 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 Seche Environnement SA, you can compare the effects of market volatilities on Samsung Electronics and Seche Environnement 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 Seche Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Seche Environnement.
Diversification Opportunities for Samsung Electronics and Seche Environnement
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Seche is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Seche Environnement SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seche Environnement 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 Seche Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seche Environnement has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Seche Environnement go up and down completely randomly.
Pair Corralation between Samsung Electronics and Seche Environnement
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Seche Environnement. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.5 times less risky than Seche Environnement. The stock trades about -0.11 of its potential returns per unit of risk. The Seche Environnement SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 7,900 in Seche Environnement SA on November 9, 2024 and sell it today you would earn a total of 640.00 from holding Seche Environnement SA or generate 8.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Seche Environnement SA
Performance |
| Timeline |
| Samsung Electronics |
| Seche Environnement |
Samsung Electronics and Seche Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Seche Environnement
The main advantage of trading using opposite Samsung Electronics and Seche Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Seche Environnement 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 Seche Environnement will offset losses from the drop in Seche Environnement's long position.| Samsung Electronics vs. Quadrise Plc | Samsung Electronics vs. ImmuPharma PLC | Samsung Electronics vs. Intuitive Investments Group | Samsung Electronics vs. European Metals Holdings |
| Seche Environnement vs. SMA Solar Technology | Seche Environnement vs. Verizon Communications | Seche Environnement vs. Sabien Technology Group | Seche Environnement vs. Gamma Communications PLC |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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