Correlation Between Samsung Electronics and Roper Technologies
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Roper Technologies 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 Roper Technologies 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 Roper Technologies, you can compare the effects of market volatilities on Samsung Electronics and Roper Technologies 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 Roper Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Roper Technologies.
Diversification Opportunities for Samsung Electronics and Roper Technologies
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Roper is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Roper Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roper Technologies 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 Roper Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roper Technologies has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Roper Technologies go up and down completely randomly.
Pair Corralation between Samsung Electronics and Roper Technologies
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Roper Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 3.04 times less risky than Roper Technologies. The stock trades about 0.0 of its potential returns per unit of risk. The Roper Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 42,765 in Roper Technologies on August 30, 2024 and sell it today you would earn a total of 13,552 from holding Roper Technologies or generate 31.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.99% |
| Values | Daily Returns |
Samsung Electronics Co vs. Roper Technologies
Performance |
| Timeline |
| Samsung Electronics |
| Roper Technologies |
Samsung Electronics and Roper Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Roper Technologies
The main advantage of trading using opposite Samsung Electronics and Roper Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Roper Technologies 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 Roper Technologies will offset losses from the drop in Roper Technologies' 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 |
| Roper Technologies vs. Lendinvest PLC | Roper Technologies vs. Neometals | Roper Technologies vs. Albion Technology General | Roper Technologies vs. Jupiter Fund Management |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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