Correlation Between Samsung Electronics and Rockwood Realisation
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Rockwood Realisation 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 Rockwood Realisation 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 Rockwood Realisation PLC, you can compare the effects of market volatilities on Samsung Electronics and Rockwood Realisation 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 Rockwood Realisation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Rockwood Realisation.
Diversification Opportunities for Samsung Electronics and Rockwood Realisation
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Rockwood is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Rockwood Realisation PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockwood Realisation 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 Rockwood Realisation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockwood Realisation PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Rockwood Realisation go up and down completely randomly.
Pair Corralation between Samsung Electronics and Rockwood Realisation
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Rockwood Realisation. In addition to that, Samsung Electronics is 4.63 times more volatile than Rockwood Realisation PLC. It trades about -0.42 of its total potential returns per unit of risk. Rockwood Realisation PLC is currently generating about 0.39 per unit of volatility. If you would invest 25,400 in Rockwood Realisation PLC on September 24, 2024 and sell it today you would earn a total of 800.00 from holding Rockwood Realisation PLC or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Rockwood Realisation PLC
Performance |
| Timeline |
| Samsung Electronics |
| Rockwood Realisation PLC |
Samsung Electronics and Rockwood Realisation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Rockwood Realisation
The main advantage of trading using opposite Samsung Electronics and Rockwood Realisation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Rockwood Realisation 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 Rockwood Realisation will offset losses from the drop in Rockwood Realisation's long position.| Samsung Electronics vs. Rockfire Resources plc | Samsung Electronics vs. Tlou Energy | Samsung Electronics vs. Ikigai Ventures | Samsung Electronics vs. Falcon Oil Gas |
| Rockwood Realisation vs. Samsung Electronics Co | Rockwood Realisation vs. Samsung Electronics Co | Rockwood Realisation vs. Hyundai Motor | Rockwood Realisation vs. Toyota Motor Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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