Correlation Between Samsung Electronics and PPHE Hotel
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and PPHE Hotel 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 PPHE Hotel 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 PPHE Hotel Group, you can compare the effects of market volatilities on Samsung Electronics and PPHE Hotel 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 PPHE Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and PPHE Hotel.
Diversification Opportunities for Samsung Electronics and PPHE Hotel
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and PPHE is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and PPHE Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE Hotel Group 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 PPHE Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE Hotel Group has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and PPHE Hotel go up and down completely randomly.
Pair Corralation between Samsung Electronics and PPHE Hotel
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the PPHE Hotel. In addition to that, Samsung Electronics is 1.52 times more volatile than PPHE Hotel Group. It trades about -0.07 of its total potential returns per unit of risk. PPHE Hotel Group is currently generating about -0.05 per unit of volatility. If you would invest 130,712 in PPHE Hotel Group on August 28, 2024 and sell it today you would lose (12,212) from holding PPHE Hotel Group or give up 9.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. PPHE Hotel Group
Performance |
| Timeline |
| Samsung Electronics |
| PPHE Hotel Group |
Samsung Electronics and PPHE Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and PPHE Hotel
The main advantage of trading using opposite Samsung Electronics and PPHE Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, PPHE Hotel 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 PPHE Hotel will offset losses from the drop in PPHE Hotel's long position.| Samsung Electronics vs. Toyota Motor Corp | Samsung Electronics vs. SoftBank Group Corp | Samsung Electronics vs. OTP Bank Nyrt | Samsung Electronics vs. Las Vegas Sands |
| PPHE Hotel vs. Chocoladefabriken Lindt Spruengli | PPHE Hotel vs. National Atomic Co | PPHE Hotel vs. OTP Bank Nyrt | PPHE Hotel vs. Samsung Electronics Co |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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