Correlation Between Samsung Electronics and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Hollywood Bowl 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 Hollywood Bowl 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 Hollywood Bowl Group, you can compare the effects of market volatilities on Samsung Electronics and Hollywood Bowl 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 Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Hollywood Bowl.
Diversification Opportunities for Samsung Electronics and Hollywood Bowl
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Hollywood is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group 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 Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Samsung Electronics and Hollywood Bowl
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Hollywood Bowl. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.02 times less risky than Hollywood Bowl. The stock trades about -0.03 of its potential returns per unit of risk. The Hollywood Bowl Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 25,271 in Hollywood Bowl Group on October 28, 2024 and sell it today you would earn a total of 2,929 from holding Hollywood Bowl Group or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Samsung Electronics Co vs. Hollywood Bowl Group
Performance |
| Timeline |
| Samsung Electronics |
| Hollywood Bowl Group |
Samsung Electronics and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Hollywood Bowl
The main advantage of trading using opposite Samsung Electronics and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.| Samsung Electronics vs. Canadian General Investments | Samsung Electronics vs. Spotify Technology SA | Samsung Electronics vs. Raytheon Technologies Corp | Samsung Electronics vs. Polar Capital Technology |
| Hollywood Bowl vs. Aptitude Software Group | Hollywood Bowl vs. Sealed Air Corp | Hollywood Bowl vs. Automatic Data Processing | Hollywood Bowl vs. Teradata 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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