Correlation Between Samsung Electronics and Sage Group
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sage 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 Sage 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 Sage Group PLC, you can compare the effects of market volatilities on Samsung Electronics and Sage 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 Sage Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sage Group.
Diversification Opportunities for Samsung Electronics and Sage Group
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Sage is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sage Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sage 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 Sage Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sage Group PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sage Group go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sage Group
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Sage Group. In addition to that, Samsung Electronics is 1.09 times more volatile than Sage Group PLC. It trades about -0.03 of its total potential returns per unit of risk. Sage Group PLC is currently generating about 0.08 per unit of volatility. If you would invest 73,981 in Sage Group PLC on October 12, 2024 and sell it today you would earn a total of 55,869 from holding Sage Group PLC or generate 75.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Samsung Electronics Co vs. Sage Group PLC
Performance |
| Timeline |
| Samsung Electronics |
| Sage Group PLC |
Samsung Electronics and Sage Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Sage Group
The main advantage of trading using opposite Samsung Electronics and Sage Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sage 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 Sage Group will offset losses from the drop in Sage Group's long position.| Samsung Electronics vs. Gaztransport et Technigaz | Samsung Electronics vs. Alien Metals | Samsung Electronics vs. Silvercorp Metals | Samsung Electronics vs. Ecclesiastical Insurance Office |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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