Correlation Between Samsung Electronics and Walmart
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Walmart 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 Walmart 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 Walmart, you can compare the effects of market volatilities on Samsung Electronics and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Walmart.
Diversification Opportunities for Samsung Electronics and Walmart
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Walmart is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Walmart go up and down completely randomly.
Pair Corralation between Samsung Electronics and Walmart
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Walmart. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 9.91 times less risky than Walmart. The stock trades about -0.01 of its potential returns per unit of risk. The Walmart is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,325 in Walmart on August 26, 2024 and sell it today you would earn a total of 1,635 from holding Walmart or generate 37.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Samsung Electronics Co vs. Walmart
Performance |
| Timeline |
| Samsung Electronics |
| Walmart |
Samsung Electronics and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Walmart
The main advantage of trading using opposite Samsung Electronics and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart'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 |
| Walmart vs. Samsung Electronics Co | Walmart vs. Samsung Electronics Co | Walmart vs. Hyundai Motor | Walmart 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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