Correlation Between Samsung Electronics and Schroders Investment
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Schroders Investment 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 Schroders Investment 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 Schroders Investment Trusts, you can compare the effects of market volatilities on Samsung Electronics and Schroders Investment 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 Schroders Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Schroders Investment.
Diversification Opportunities for Samsung Electronics and Schroders Investment
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Schroders is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Schroders Investment Trusts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroders Investment 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 Schroders Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroders Investment has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Schroders Investment go up and down completely randomly.
Pair Corralation between Samsung Electronics and Schroders Investment
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Schroders Investment. In addition to that, Samsung Electronics is 1.95 times more volatile than Schroders Investment Trusts. It trades about -0.04 of its total potential returns per unit of risk. Schroders Investment Trusts is currently generating about 0.05 per unit of volatility. If you would invest 40,449 in Schroders Investment Trusts on September 2, 2024 and sell it today you would earn a total of 6,851 from holding Schroders Investment Trusts or generate 16.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Schroders Investment Trusts
Performance |
| Timeline |
| Samsung Electronics |
| Schroders Investment |
Samsung Electronics and Schroders Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Schroders Investment
The main advantage of trading using opposite Samsung Electronics and Schroders Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Schroders Investment 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 Schroders Investment will offset losses from the drop in Schroders Investment's long position.| Samsung Electronics vs. Cizzle Biotechnology Holdings | Samsung Electronics vs. International Biotechnology Trust | Samsung Electronics vs. TechnipFMC PLC | Samsung Electronics vs. Intuitive Investments Group |
| Schroders Investment vs. Toyota Motor Corp | Schroders Investment vs. SoftBank Group Corp | Schroders Investment vs. OTP Bank Nyrt | Schroders Investment vs. Las Vegas Sands |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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