Correlation Between Samsung Electronics and Whitbread PLC
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Whitbread PLC 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 Whitbread PLC 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 Whitbread PLC, you can compare the effects of market volatilities on Samsung Electronics and Whitbread PLC 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 Whitbread PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Whitbread PLC.
Diversification Opportunities for Samsung Electronics and Whitbread PLC
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Whitbread is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Whitbread PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitbread 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 Whitbread PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitbread PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Whitbread PLC go up and down completely randomly.
Pair Corralation between Samsung Electronics and Whitbread PLC
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 2.09 times more return on investment than Whitbread PLC. However, Samsung Electronics is 2.09 times more volatile than Whitbread PLC. It trades about -0.05 of its potential returns per unit of risk. Whitbread PLC is currently generating about -0.12 per unit of risk. If you would invest 81,700 in Samsung Electronics Co on September 12, 2024 and sell it today you would lose (3,300) from holding Samsung Electronics Co or give up 4.04% 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. Whitbread PLC
Performance |
| Timeline |
| Samsung Electronics |
| Whitbread PLC |
Samsung Electronics and Whitbread PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Whitbread PLC
The main advantage of trading using opposite Samsung Electronics and Whitbread PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Whitbread PLC 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 Whitbread PLC will offset losses from the drop in Whitbread PLC's long position.| Samsung Electronics vs. Norwegian Air Shuttle | Samsung Electronics vs. GreenX Metals | Samsung Electronics vs. AMG Advanced Metallurgical | Samsung Electronics vs. Gaztransport et Technigaz |
| Whitbread PLC vs. Deltex Medical Group | Whitbread PLC vs. Sabre Insurance Group | Whitbread PLC vs. bet at home AG | Whitbread PLC vs. Vienna Insurance Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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