Correlation Between Samsung Electronics and MoneysupermarketCom
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and MoneysupermarketCom 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 MoneysupermarketCom 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 MoneysupermarketCom Group PLC, you can compare the effects of market volatilities on Samsung Electronics and MoneysupermarketCom 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 MoneysupermarketCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and MoneysupermarketCom.
Diversification Opportunities for Samsung Electronics and MoneysupermarketCom
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and MoneysupermarketCom is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and MoneysupermarketCom Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneysupermarketCom 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 MoneysupermarketCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MoneysupermarketCom has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and MoneysupermarketCom go up and down completely randomly.
Pair Corralation between Samsung Electronics and MoneysupermarketCom
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the MoneysupermarketCom. In addition to that, Samsung Electronics is 1.2 times more volatile than MoneysupermarketCom Group PLC. It trades about -0.09 of its total potential returns per unit of risk. MoneysupermarketCom Group PLC is currently generating about -0.04 per unit of volatility. If you would invest 22,287 in MoneysupermarketCom Group PLC on August 30, 2024 and sell it today you would lose (2,357) from holding MoneysupermarketCom Group PLC or give up 10.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. MoneysupermarketCom Group PLC
Performance |
| Timeline |
| Samsung Electronics |
| MoneysupermarketCom |
Samsung Electronics and MoneysupermarketCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and MoneysupermarketCom
The main advantage of trading using opposite Samsung Electronics and MoneysupermarketCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, MoneysupermarketCom 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 MoneysupermarketCom will offset losses from the drop in MoneysupermarketCom's long position.| Samsung Electronics vs. Litigation Capital Management | Samsung Electronics vs. Liontrust Asset Management | Samsung Electronics vs. Invesco Physical Silver | Samsung Electronics vs. Westlake Chemical Corp |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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