Correlation Between Samsung Electronics and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Ebro Foods 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 Ebro Foods 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 Ebro Foods, you can compare the effects of market volatilities on Samsung Electronics and Ebro Foods 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 Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Ebro Foods.
Diversification Opportunities for Samsung Electronics and Ebro Foods
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Ebro is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Ebro Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods 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 Ebro Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebro Foods has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Ebro Foods go up and down completely randomly.
Pair Corralation between Samsung Electronics and Ebro Foods
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Ebro Foods. In addition to that, Samsung Electronics is 4.46 times more volatile than Ebro Foods. It trades about -0.05 of its total potential returns per unit of risk. Ebro Foods is currently generating about -0.06 per unit of volatility. If you would invest 1,611 in Ebro Foods on August 25, 2024 and sell it today you would lose (16.00) from holding Ebro Foods or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Ebro Foods
Performance |
| Timeline |
| Samsung Electronics |
| Ebro Foods |
Samsung Electronics and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Ebro Foods
The main advantage of trading using opposite Samsung Electronics and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Ebro Foods 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 Ebro Foods will offset losses from the drop in Ebro Foods' long position.| Samsung Electronics vs. Aeorema Communications Plc | Samsung Electronics vs. Silvercorp Metals | Samsung Electronics vs. Greenroc Mining PLC | Samsung Electronics vs. Verizon Communications |
| Ebro Foods vs. Samsung Electronics Co | Ebro Foods vs. Samsung Electronics Co | Ebro Foods vs. Hyundai Motor | Ebro Foods 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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