Correlation Between Samsung Electronics and Bloomsbury Publishing
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Bloomsbury Publishing 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 Bloomsbury Publishing 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 Bloomsbury Publishing Plc, you can compare the effects of market volatilities on Samsung Electronics and Bloomsbury Publishing 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 Bloomsbury Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Bloomsbury Publishing.
Diversification Opportunities for Samsung Electronics and Bloomsbury Publishing
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Samsung and Bloomsbury is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Bloomsbury Publishing Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomsbury Publishing Plc 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 Bloomsbury Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomsbury Publishing Plc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Bloomsbury Publishing go up and down completely randomly.
Pair Corralation between Samsung Electronics and Bloomsbury Publishing
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.51 times more return on investment than Bloomsbury Publishing. However, Samsung Electronics is 1.51 times more volatile than Bloomsbury Publishing Plc. It trades about -0.04 of its potential returns per unit of risk. Bloomsbury Publishing Plc is currently generating about -0.25 per unit of risk. If you would invest 88,300 in Samsung Electronics Co on August 25, 2024 and sell it today you would lose (2,700) from holding Samsung Electronics Co or give up 3.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Bloomsbury Publishing Plc
Performance |
| Timeline |
| Samsung Electronics |
| Bloomsbury Publishing Plc |
Samsung Electronics and Bloomsbury Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Bloomsbury Publishing
The main advantage of trading using opposite Samsung Electronics and Bloomsbury Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Bloomsbury Publishing 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 Bloomsbury Publishing will offset losses from the drop in Bloomsbury Publishing'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 |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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