Correlation Between Samsung Electronics and Heavitree Brewery
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Heavitree Brewery 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 Heavitree Brewery 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 Heavitree Brewery, you can compare the effects of market volatilities on Samsung Electronics and Heavitree Brewery 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 Heavitree Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Heavitree Brewery.
Diversification Opportunities for Samsung Electronics and Heavitree Brewery
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Samsung and Heavitree is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Heavitree Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heavitree Brewery 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 Heavitree Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heavitree Brewery has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Heavitree Brewery go up and down completely randomly.
Pair Corralation between Samsung Electronics and Heavitree Brewery
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Heavitree Brewery. In addition to that, Samsung Electronics is 3.21 times more volatile than Heavitree Brewery. It trades about -0.04 of its total potential returns per unit of risk. Heavitree Brewery is currently generating about 0.0 per unit of volatility. If you would invest 27,852 in Heavitree Brewery on November 5, 2024 and sell it today you would earn a total of 148.00 from holding Heavitree Brewery or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Samsung Electronics Co vs. Heavitree Brewery
Performance |
| Timeline |
| Samsung Electronics |
| Heavitree Brewery |
Samsung Electronics and Heavitree Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Heavitree Brewery
The main advantage of trading using opposite Samsung Electronics and Heavitree Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Heavitree Brewery 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 Heavitree Brewery will offset losses from the drop in Heavitree Brewery's long position.| Samsung Electronics vs. Gamma Communications PLC | Samsung Electronics vs. Hilton Food Group | Samsung Electronics vs. Trainline Plc | Samsung Electronics vs. Ebro Foods |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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