Correlation Between Samsung Electronics and Microlise Group
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Microlise Group 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 Microlise Group 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 Microlise Group PLC, you can compare the effects of market volatilities on Samsung Electronics and Microlise Group 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 Microlise Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Microlise Group.
Diversification Opportunities for Samsung Electronics and Microlise Group
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Microlise is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Microlise Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microlise Group 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 Microlise Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microlise Group PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Microlise Group go up and down completely randomly.
Pair Corralation between Samsung Electronics and Microlise Group
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Microlise Group. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.58 times less risky than Microlise Group. The stock trades about -0.19 of its potential returns per unit of risk. The Microlise Group PLC is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 12,837 in Microlise Group PLC on September 2, 2024 and sell it today you would lose (2,337) from holding Microlise Group PLC or give up 18.21% 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. Microlise Group PLC
Performance |
| Timeline |
| Samsung Electronics |
| Microlise Group PLC |
Samsung Electronics and Microlise Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Microlise Group
The main advantage of trading using opposite Samsung Electronics and Microlise Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Microlise Group 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 Microlise Group will offset losses from the drop in Microlise Group's long position.| Samsung Electronics vs. Playtech Plc | Samsung Electronics vs. Schweiter Technologies AG | Samsung Electronics vs. Datalogic | Samsung Electronics vs. Teradata Corp |
| Microlise Group vs. SupplyMe Capital PLC | Microlise Group vs. Lloyds Banking Group | Microlise Group vs. Premier African Minerals | Microlise Group vs. SANTANDER UK 8 |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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