Correlation Between Samsung Electronics and Fortune Brands
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Fortune Brands 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 Fortune Brands 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 Fortune Brands Home, you can compare the effects of market volatilities on Samsung Electronics and Fortune Brands 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 Fortune Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Fortune Brands.
Diversification Opportunities for Samsung Electronics and Fortune Brands
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and Fortune is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Fortune Brands Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Brands Home 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 Fortune Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Brands Home has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Fortune Brands go up and down completely randomly.
Pair Corralation between Samsung Electronics and Fortune Brands
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Fortune Brands. In addition to that, Samsung Electronics is 1.31 times more volatile than Fortune Brands Home. It trades about -0.22 of its total potential returns per unit of risk. Fortune Brands Home is currently generating about 0.03 per unit of volatility. If you would invest 7,672 in Fortune Brands Home on September 4, 2024 and sell it today you would earn a total of 173.00 from holding Fortune Brands Home or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.62% |
| Values | Daily Returns |
Samsung Electronics Co vs. Fortune Brands Home
Performance |
| Timeline |
| Samsung Electronics |
| Fortune Brands Home |
Samsung Electronics and Fortune Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Fortune Brands
The main advantage of trading using opposite Samsung Electronics and Fortune Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Fortune Brands 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 Fortune Brands will offset losses from the drop in Fortune Brands' long position.| Samsung Electronics vs. FC Investment Trust | Samsung Electronics vs. Smithson Investment Trust | Samsung Electronics vs. Beeks Trading | Samsung Electronics vs. New Residential Investment |
| Fortune Brands vs. Samsung Electronics Co | Fortune Brands vs. Samsung Electronics Co | Fortune Brands vs. Hyundai Motor | Fortune Brands 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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