Correlation Between Samsung Electronics and RBG Holdings
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and RBG Holdings 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 RBG Holdings 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 RBG Holdings PLC, you can compare the effects of market volatilities on Samsung Electronics and RBG Holdings 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 RBG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and RBG Holdings.
Diversification Opportunities for Samsung Electronics and RBG Holdings
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and RBG is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and RBG Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBG Holdings 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 RBG Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBG Holdings PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and RBG Holdings go up and down completely randomly.
Pair Corralation between Samsung Electronics and RBG Holdings
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.33 times more return on investment than RBG Holdings. However, Samsung Electronics Co is 3.03 times less risky than RBG Holdings. It trades about -0.01 of its potential returns per unit of risk. RBG Holdings PLC is currently generating about -0.09 per unit of risk. If you would invest 96,324 in Samsung Electronics Co on September 5, 2024 and sell it today you would lose (16,924) from holding Samsung Electronics Co or give up 17.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Samsung Electronics Co vs. RBG Holdings PLC
Performance |
| Timeline |
| Samsung Electronics |
| RBG Holdings PLC |
Samsung Electronics and RBG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and RBG Holdings
The main advantage of trading using opposite Samsung Electronics and RBG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, RBG Holdings 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 RBG Holdings will offset losses from the drop in RBG Holdings' long position.| Samsung Electronics vs. Berkshire Hathaway | Samsung Electronics vs. Chocoladefabriken Lindt Spruengli | Samsung Electronics vs. Rockwood Realisation PLC | Samsung Electronics vs. Toyota Motor Corp |
| RBG Holdings vs. Samsung Electronics Co | RBG Holdings vs. Samsung Electronics Co | RBG Holdings vs. Toyota Motor Corp | RBG Holdings vs. Hon Hai Precision |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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