Correlation Between Samsung Electronics and Carlsberg
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Carlsberg 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 Carlsberg 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 Carlsberg AS B, you can compare the effects of market volatilities on Samsung Electronics and Carlsberg 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 Carlsberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Carlsberg.
Diversification Opportunities for Samsung Electronics and Carlsberg
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Carlsberg is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Carlsberg AS B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS B 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 Carlsberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg AS B has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Carlsberg go up and down completely randomly.
Pair Corralation between Samsung Electronics and Carlsberg
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Carlsberg. In addition to that, Samsung Electronics is 2.06 times more volatile than Carlsberg AS B. It trades about -0.08 of its total potential returns per unit of risk. Carlsberg AS B is currently generating about -0.06 per unit of volatility. If you would invest 75,450 in Carlsberg AS B on August 31, 2024 and sell it today you would lose (1,760) from holding Carlsberg AS B or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. Carlsberg AS B
Performance |
| Timeline |
| Samsung Electronics |
| Carlsberg AS B |
Samsung Electronics and Carlsberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Carlsberg
The main advantage of trading using opposite Samsung Electronics and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Carlsberg 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 Carlsberg will offset losses from the drop in Carlsberg's long position.| Samsung Electronics vs. The Investment | Samsung Electronics vs. Kinnevik Investment AB | Samsung Electronics vs. The Mercantile Investment | Samsung Electronics vs. Smithson Investment Trust |
| Carlsberg vs. Take Two Interactive Software | Carlsberg vs. Federal Realty Investment | Carlsberg vs. Aurora Investment Trust | Carlsberg vs. Taylor Maritime Investments |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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