Correlation Between Samsung Electronics and Serco
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Serco 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 Serco 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 Serco Group, you can compare the effects of market volatilities on Samsung Electronics and Serco 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 Serco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Serco.
Diversification Opportunities for Samsung Electronics and Serco
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Serco is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Serco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serco Group 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 Serco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serco Group has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Serco go up and down completely randomly.
Pair Corralation between Samsung Electronics and Serco
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.26 times more return on investment than Serco. However, Samsung Electronics is 1.26 times more volatile than Serco Group. It trades about -0.05 of its potential returns per unit of risk. Serco Group is currently generating about -0.23 per unit of risk. If you would invest 88,900 in Samsung Electronics Co on August 30, 2024 and sell it today you would lose (3,800) from holding Samsung Electronics Co or give up 4.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Serco Group
Performance |
| Timeline |
| Samsung Electronics |
| Serco Group |
Samsung Electronics and Serco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Serco
The main advantage of trading using opposite Samsung Electronics and Serco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Serco 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 Serco will offset losses from the drop in Serco's long position.| Samsung Electronics vs. Litigation Capital Management | Samsung Electronics vs. Liontrust Asset Management | Samsung Electronics vs. Invesco Physical Silver | Samsung Electronics vs. Westlake Chemical Corp |
| Serco vs. Spotify Technology SA | Serco vs. X FAB Silicon Foundries | Serco vs. Auction Technology Group | Serco vs. Microchip Technology |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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