Correlation Between Samsung Electronics and Dominos Pizza
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Dominos Pizza 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 Dominos Pizza 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 Dominos Pizza Group, you can compare the effects of market volatilities on Samsung Electronics and Dominos Pizza 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 Dominos Pizza. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Dominos Pizza.
Diversification Opportunities for Samsung Electronics and Dominos Pizza
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Dominos is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Dominos Pizza Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominos Pizza 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 Dominos Pizza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominos Pizza Group has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Dominos Pizza go up and down completely randomly.
Pair Corralation between Samsung Electronics and Dominos Pizza
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Dominos Pizza. In addition to that, Samsung Electronics is 1.49 times more volatile than Dominos Pizza Group. It trades about -0.04 of its total potential returns per unit of risk. Dominos Pizza Group is currently generating about 0.26 per unit of volatility. If you would invest 30,800 in Dominos Pizza Group on August 27, 2024 and sell it today you would earn a total of 3,220 from holding Dominos Pizza Group or generate 10.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Dominos Pizza Group
Performance |
| Timeline |
| Samsung Electronics |
| Dominos Pizza Group |
Samsung Electronics and Dominos Pizza Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Dominos Pizza
The main advantage of trading using opposite Samsung Electronics and Dominos Pizza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Dominos Pizza 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 Dominos Pizza will offset losses from the drop in Dominos Pizza'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 |
| Dominos Pizza vs. Datalogic | Dominos Pizza vs. Vienna Insurance Group | Dominos Pizza vs. Extra Space Storage | Dominos Pizza vs. JD Sports Fashion |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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