Correlation Between Samsung Electronics and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Hollywood Bowl 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 Hollywood Bowl 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 Hollywood Bowl Group, you can compare the effects of market volatilities on Samsung Electronics and Hollywood Bowl 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 Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Hollywood Bowl.
Diversification Opportunities for Samsung Electronics and Hollywood Bowl
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and Hollywood is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group 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 Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Samsung Electronics and Hollywood Bowl
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Hollywood Bowl. In addition to that, Samsung Electronics is 1.31 times more volatile than Hollywood Bowl Group. It trades about -0.03 of its total potential returns per unit of risk. Hollywood Bowl Group is currently generating about 0.07 per unit of volatility. If you would invest 23,898 in Hollywood Bowl Group on August 25, 2024 and sell it today you would earn a total of 7,552 from holding Hollywood Bowl Group or generate 31.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Hollywood Bowl Group
Performance |
| Timeline |
| Samsung Electronics |
| Hollywood Bowl Group |
Samsung Electronics and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Hollywood Bowl
The main advantage of trading using opposite Samsung Electronics and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.| Samsung Electronics vs. Aeorema Communications Plc | Samsung Electronics vs. Silvercorp Metals | Samsung Electronics vs. Greenroc Mining PLC | Samsung Electronics vs. Verizon Communications |
| Hollywood Bowl vs. Samsung Electronics Co | Hollywood Bowl vs. Samsung Electronics Co | Hollywood Bowl vs. Toyota Motor Corp | Hollywood Bowl vs. Hon Hai Precision |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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