Correlation Between Samsung Electronics and J Sainsbury
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and J Sainsbury 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 J Sainsbury 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 J Sainsbury PLC, you can compare the effects of market volatilities on Samsung Electronics and J Sainsbury 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 J Sainsbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and J Sainsbury.
Diversification Opportunities for Samsung Electronics and J Sainsbury
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and SBRY is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and J Sainsbury PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Sainsbury 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 J Sainsbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Sainsbury PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and J Sainsbury go up and down completely randomly.
Pair Corralation between Samsung Electronics and J Sainsbury
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.77 times more return on investment than J Sainsbury. However, Samsung Electronics is 1.77 times more volatile than J Sainsbury PLC. It trades about 0.01 of its potential returns per unit of risk. J Sainsbury PLC is currently generating about -0.16 per unit of risk. If you would invest 88,300 in Samsung Electronics Co on August 28, 2024 and sell it today you would lose (300.00) from holding Samsung Electronics Co or give up 0.34% 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. J Sainsbury PLC
Performance |
| Timeline |
| Samsung Electronics |
| J Sainsbury PLC |
Samsung Electronics and J Sainsbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and J Sainsbury
The main advantage of trading using opposite Samsung Electronics and J Sainsbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, J Sainsbury 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 J Sainsbury will offset losses from the drop in J Sainsbury's long position.| Samsung Electronics vs. Royal Bank of | Samsung Electronics vs. Cembra Money Bank | Samsung Electronics vs. MT Bank Corp | Samsung Electronics vs. St Galler Kantonalbank |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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