Correlation Between Samsung Electronics and Gaming Realms
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Gaming Realms 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 Gaming Realms 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 Gaming Realms plc, you can compare the effects of market volatilities on Samsung Electronics and Gaming Realms 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 Gaming Realms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Gaming Realms.
Diversification Opportunities for Samsung Electronics and Gaming Realms
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Gaming is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Gaming Realms plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Realms 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 Gaming Realms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Realms plc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Gaming Realms go up and down completely randomly.
Pair Corralation between Samsung Electronics and Gaming Realms
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 16.99 times less return on investment than Gaming Realms. But when comparing it to its historical volatility, Samsung Electronics Co is 1.29 times less risky than Gaming Realms. It trades about 0.01 of its potential returns per unit of risk. Gaming Realms plc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,320 in Gaming Realms plc on August 29, 2024 and sell it today you would earn a total of 360.00 from holding Gaming Realms plc or generate 10.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Gaming Realms plc
Performance |
| Timeline |
| Samsung Electronics |
| Gaming Realms plc |
Samsung Electronics and Gaming Realms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Gaming Realms
The main advantage of trading using opposite Samsung Electronics and Gaming Realms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Gaming Realms 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 Gaming Realms will offset losses from the drop in Gaming Realms' long position.| Samsung Electronics vs. Ondine Biomedical | Samsung Electronics vs. Europa Metals | Samsung Electronics vs. Lendinvest PLC | Samsung Electronics vs. Neometals |
| Gaming Realms vs. Ondine Biomedical | Gaming Realms vs. Europa Metals | Gaming Realms vs. Lendinvest PLC | Gaming Realms vs. Neometals |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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