Correlation Between Samsung Electronics and Premier Foods
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Premier Foods 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 Premier Foods 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 Premier Foods PLC, you can compare the effects of market volatilities on Samsung Electronics and Premier Foods 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 Premier Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Premier Foods.
Diversification Opportunities for Samsung Electronics and Premier Foods
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Premier is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Premier Foods PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Foods 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 Premier Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Foods PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Premier Foods go up and down completely randomly.
Pair Corralation between Samsung Electronics and Premier Foods
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Premier Foods. In addition to that, Samsung Electronics is 1.44 times more volatile than Premier Foods PLC. It trades about -0.2 of its total potential returns per unit of risk. Premier Foods PLC is currently generating about -0.04 per unit of volatility. If you would invest 18,840 in Premier Foods PLC on October 26, 2024 and sell it today you would lose (420.00) from holding Premier Foods PLC or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Premier Foods PLC
Performance |
| Timeline |
| Samsung Electronics |
| Premier Foods PLC |
Samsung Electronics and Premier Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Premier Foods
The main advantage of trading using opposite Samsung Electronics and Premier Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Premier Foods 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 Premier Foods will offset losses from the drop in Premier Foods' long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Toyota Motor Corp | Samsung Electronics vs. State Bank of | Samsung Electronics vs. SoftBank Group Corp |
| Premier Foods vs. Samsung Electronics Co | Premier Foods vs. Samsung Electronics Co | Premier Foods vs. Toyota Motor Corp | Premier Foods vs. State Bank of |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |