Correlation Between Samsung Electronics and Kroger
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Kroger 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 Kroger 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 Kroger Co, you can compare the effects of market volatilities on Samsung Electronics and Kroger 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 Kroger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Kroger.
Diversification Opportunities for Samsung Electronics and Kroger
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Kroger is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Kroger Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kroger 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 Kroger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kroger has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Kroger go up and down completely randomly.
Pair Corralation between Samsung Electronics and Kroger
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Kroger. In addition to that, Samsung Electronics is 2.77 times more volatile than Kroger Co. It trades about -0.08 of its total potential returns per unit of risk. Kroger Co is currently generating about 0.31 per unit of volatility. If you would invest 5,608 in Kroger Co on August 30, 2024 and sell it today you would earn a total of 455.00 from holding Kroger Co or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Kroger Co
Performance |
| Timeline |
| Samsung Electronics |
| Kroger |
Samsung Electronics and Kroger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Kroger
The main advantage of trading using opposite Samsung Electronics and Kroger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Kroger 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 Kroger will offset losses from the drop in Kroger's long position.| Samsung Electronics vs. Lundin Mining Corp | Samsung Electronics vs. Metals Exploration Plc | Samsung Electronics vs. Check Point Software | Samsung Electronics vs. GreenX Metals |
| Kroger vs. PPHE Hotel Group | Kroger vs. Roebuck Food Group | Kroger vs. Greenroc Mining PLC | Kroger vs. Ecofin Global Utilities |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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