Correlation Between Samsung Electronics and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and DFS Furniture 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 DFS Furniture 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 DFS Furniture PLC, you can compare the effects of market volatilities on Samsung Electronics and DFS Furniture 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 DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and DFS Furniture.
Diversification Opportunities for Samsung Electronics and DFS Furniture
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and DFS is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture 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 DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and DFS Furniture go up and down completely randomly.
Pair Corralation between Samsung Electronics and DFS Furniture
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the DFS Furniture. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.33 times less risky than DFS Furniture. The stock trades about -0.03 of its potential returns per unit of risk. The DFS Furniture PLC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 14,540 in DFS Furniture PLC on October 25, 2024 and sell it today you would lose (340.00) from holding DFS Furniture PLC or give up 2.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. DFS Furniture PLC
Performance |
| Timeline |
| Samsung Electronics |
| DFS Furniture PLC |
Samsung Electronics and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and DFS Furniture
The main advantage of trading using opposite Samsung Electronics and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.| Samsung Electronics vs. Raytheon Technologies Corp | Samsung Electronics vs. Allianz Technology Trust | Samsung Electronics vs. Gaming Realms plc | Samsung Electronics vs. Roper Technologies |
| DFS Furniture vs. Samsung Electronics Co | DFS Furniture vs. Samsung Electronics Co | DFS Furniture vs. Toyota Motor Corp | DFS Furniture vs. Reliance Industries Ltd |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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