Correlation Between Samsung Electronics and WW Grainger
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and WW Grainger 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 WW Grainger 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 WW Grainger, you can compare the effects of market volatilities on Samsung Electronics and WW Grainger 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 WW Grainger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and WW Grainger.
Diversification Opportunities for Samsung Electronics and WW Grainger
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and 0IZI is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and WW Grainger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WW Grainger 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 WW Grainger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WW Grainger has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and WW Grainger go up and down completely randomly.
Pair Corralation between Samsung Electronics and WW Grainger
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the WW Grainger. In addition to that, Samsung Electronics is 2.46 times more volatile than WW Grainger. It trades about -0.07 of its total potential returns per unit of risk. WW Grainger is currently generating about -0.1 per unit of volatility. If you would invest 122,168 in WW Grainger on September 12, 2024 and sell it today you would lose (3,624) from holding WW Grainger or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. WW Grainger
Performance |
| Timeline |
| Samsung Electronics |
| WW Grainger |
Samsung Electronics and WW Grainger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and WW Grainger
The main advantage of trading using opposite Samsung Electronics and WW Grainger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, WW Grainger 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 WW Grainger will offset losses from the drop in WW Grainger's long position.| Samsung Electronics vs. McEwen Mining | Samsung Electronics vs. United Utilities Group | Samsung Electronics vs. Coor Service Management | Samsung Electronics vs. Jupiter Fund Management |
| WW Grainger vs. Vitec Software Group | WW Grainger vs. Associated British Foods | WW Grainger vs. International Biotechnology Trust | WW Grainger vs. Ashtead Technology Holdings |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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