Correlation Between Samsung Electronics and Waste Management
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Waste Management 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 Waste Management 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 Waste Management, you can compare the effects of market volatilities on Samsung Electronics and Waste Management 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 Waste Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Waste Management.
Diversification Opportunities for Samsung Electronics and Waste Management
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Waste is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management 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 Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Waste Management go up and down completely randomly.
Pair Corralation between Samsung Electronics and Waste Management
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Waste Management. In addition to that, Samsung Electronics is 1.64 times more volatile than Waste Management. It trades about 0.0 of its total potential returns per unit of risk. Waste Management is currently generating about 0.07 per unit of volatility. If you would invest 16,287 in Waste Management on August 30, 2024 and sell it today you would earn a total of 6,645 from holding Waste Management or generate 40.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Samsung Electronics Co vs. Waste Management
Performance |
| Timeline |
| Samsung Electronics |
| Waste Management |
Samsung Electronics and Waste Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Waste Management
The main advantage of trading using opposite Samsung Electronics and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Waste Management 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 Waste Management will offset losses from the drop in Waste Management'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 |
| Waste Management vs. Lendinvest PLC | Waste Management vs. Neometals | Waste Management vs. Albion Technology General | Waste Management 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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