Correlation Between Samsung Electronics and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and XLMedia 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 XLMedia 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 XLMedia PLC, you can compare the effects of market volatilities on Samsung Electronics and XLMedia 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 XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and XLMedia PLC.
Diversification Opportunities for Samsung Electronics and XLMedia PLC
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and XLMedia is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia 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 XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and XLMedia PLC go up and down completely randomly.
Pair Corralation between Samsung Electronics and XLMedia PLC
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the XLMedia PLC. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 3.49 times less risky than XLMedia PLC. The stock trades about -0.01 of its potential returns per unit of risk. The XLMedia PLC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,675 in XLMedia PLC on August 24, 2024 and sell it today you would lose (475.00) from holding XLMedia PLC or give up 28.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. XLMedia PLC
Performance |
| Timeline |
| Samsung Electronics |
| XLMedia PLC |
Samsung Electronics and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and XLMedia PLC
The main advantage of trading using opposite Samsung Electronics and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, XLMedia 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.| Samsung Electronics vs. United Internet AG | Samsung Electronics vs. Fresenius Medical Care | Samsung Electronics vs. STMicroelectronics NV | Samsung Electronics vs. Medical Properties Trust |
| XLMedia PLC vs. Samsung Electronics Co | XLMedia PLC vs. Samsung Electronics Co | XLMedia PLC vs. Hyundai Motor | XLMedia PLC vs. Toyota Motor Corp |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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