Correlation Between Samsung Electronics and Beazer Homes
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Beazer Homes 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 Beazer Homes 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 Beazer Homes USA, you can compare the effects of market volatilities on Samsung Electronics and Beazer Homes 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 Beazer Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Beazer Homes.
Diversification Opportunities for Samsung Electronics and Beazer Homes
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Beazer is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Beazer Homes USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beazer Homes USA 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 Beazer Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beazer Homes USA has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Beazer Homes go up and down completely randomly.
Pair Corralation between Samsung Electronics and Beazer Homes
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.85 times more return on investment than Beazer Homes. However, Samsung Electronics Co is 1.18 times less risky than Beazer Homes. It trades about 0.13 of its potential returns per unit of risk. Beazer Homes USA is currently generating about 0.0 per unit of risk. If you would invest 89,900 in Samsung Electronics Co on September 14, 2024 and sell it today you would earn a total of 7,250 from holding Samsung Electronics Co or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Samsung Electronics Co vs. Beazer Homes USA
Performance |
| Timeline |
| Samsung Electronics |
| Beazer Homes USA |
Samsung Electronics and Beazer Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Beazer Homes
The main advantage of trading using opposite Samsung Electronics and Beazer Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Beazer Homes 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 Beazer Homes will offset losses from the drop in Beazer Homes' long position.| Samsung Electronics vs. European Metals Holdings | Samsung Electronics vs. Axfood AB | Samsung Electronics vs. McEwen Mining | Samsung Electronics vs. Roebuck Food Group |
| Beazer Homes vs. Samsung Electronics Co | Beazer Homes vs. Samsung Electronics Co | Beazer Homes vs. Hyundai Motor | Beazer Homes vs. Reliance Industries Ltd |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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