Correlation Between Samsung Electronics and World Chess
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and World Chess 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 World Chess 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 World Chess PLC, you can compare the effects of market volatilities on Samsung Electronics and World Chess 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 World Chess. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and World Chess.
Diversification Opportunities for Samsung Electronics and World Chess
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and World is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and World Chess PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Chess PLC 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 World Chess. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Chess PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and World Chess go up and down completely randomly.
Pair Corralation between Samsung Electronics and World Chess
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the World Chess. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 4.51 times less risky than World Chess. The stock trades about -0.1 of its potential returns per unit of risk. The World Chess PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 350.00 in World Chess PLC on September 1, 2024 and sell it today you would earn a total of 25.00 from holding World Chess PLC or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Samsung Electronics Co vs. World Chess PLC
Performance |
| Timeline |
| Samsung Electronics |
| World Chess PLC |
Samsung Electronics and World Chess Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and World Chess
The main advantage of trading using opposite Samsung Electronics and World Chess positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, World Chess 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 World Chess will offset losses from the drop in World Chess' long position.| Samsung Electronics vs. Ecclesiastical Insurance Office | Samsung Electronics vs. FC Investment Trust | Samsung Electronics vs. New Residential Investment | Samsung Electronics vs. DFS Furniture PLC |
| World Chess vs. SupplyMe Capital PLC | World Chess vs. Lloyds Banking Group | World Chess vs. Premier African Minerals | World Chess vs. SANTANDER UK 8 |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |