Correlation Between Samsung Electronics and Lindsell Train
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Lindsell Train 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 Lindsell Train 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 Lindsell Train Investment, you can compare the effects of market volatilities on Samsung Electronics and Lindsell Train 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 Lindsell Train. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Lindsell Train.
Diversification Opportunities for Samsung Electronics and Lindsell Train
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Lindsell is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Lindsell Train Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsell Train Investment 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 Lindsell Train. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsell Train Investment has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Lindsell Train go up and down completely randomly.
Pair Corralation between Samsung Electronics and Lindsell Train
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Lindsell Train. In addition to that, Samsung Electronics is 1.3 times more volatile than Lindsell Train Investment. It trades about -0.12 of its total potential returns per unit of risk. Lindsell Train Investment is currently generating about 0.04 per unit of volatility. If you would invest 79,600 in Lindsell Train Investment on November 28, 2024 and sell it today you would earn a total of 5,400 from holding Lindsell Train Investment or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Lindsell Train Investment
Performance |
| Timeline |
| Samsung Electronics |
| Lindsell Train Investment |
Samsung Electronics and Lindsell Train Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Lindsell Train
The main advantage of trading using opposite Samsung Electronics and Lindsell Train positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Lindsell Train 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 Lindsell Train will offset losses from the drop in Lindsell Train's long position.| Samsung Electronics vs. Impax Environmental Markets | Samsung Electronics vs. Bell Food Group | Samsung Electronics vs. Austevoll Seafood ASA | Samsung Electronics vs. Westlake Chemical Corp |
| Lindsell Train vs. Central Asia Metals | Lindsell Train vs. JD Sports Fashion | Lindsell Train vs. Associated British Foods | Lindsell Train vs. AfriTin Mining |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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