Correlation Between Samsung Electronics and Ashtead Technology
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Ashtead Technology 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 Ashtead Technology 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 Ashtead Technology Holdings, you can compare the effects of market volatilities on Samsung Electronics and Ashtead Technology 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 Ashtead Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Ashtead Technology.
Diversification Opportunities for Samsung Electronics and Ashtead Technology
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Ashtead is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Ashtead Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Technology 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 Ashtead Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashtead Technology has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Ashtead Technology go up and down completely randomly.
Pair Corralation between Samsung Electronics and Ashtead Technology
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Ashtead Technology. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.55 times less risky than Ashtead Technology. The stock trades about 0.0 of its potential returns per unit of risk. The Ashtead Technology Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 33,017 in Ashtead Technology Holdings on August 28, 2024 and sell it today you would earn a total of 19,383 from holding Ashtead Technology Holdings or generate 58.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Samsung Electronics Co vs. Ashtead Technology Holdings
Performance |
| Timeline |
| Samsung Electronics |
| Ashtead Technology |
Samsung Electronics and Ashtead Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Ashtead Technology
The main advantage of trading using opposite Samsung Electronics and Ashtead Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Ashtead Technology 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 Ashtead Technology will offset losses from the drop in Ashtead Technology's long position.| Samsung Electronics vs. Royal Bank of | Samsung Electronics vs. Cembra Money Bank | Samsung Electronics vs. MT Bank Corp | Samsung Electronics vs. St Galler Kantonalbank |
| Ashtead Technology vs. GreenX Metals | Ashtead Technology vs. Auto Trader Group | Ashtead Technology vs. Fulcrum Metals PLC | Ashtead Technology vs. Melia Hotels |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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