Correlation Between Samsung Electronics and Cairn Homes
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Cairn Homes 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 Cairn Homes 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 Cairn Homes PLC, you can compare the effects of market volatilities on Samsung Electronics and Cairn Homes 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 Cairn Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Cairn Homes.
Diversification Opportunities for Samsung Electronics and Cairn Homes
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Cairn is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Cairn Homes PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairn Homes 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 Cairn Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairn Homes PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Cairn Homes go up and down completely randomly.
Pair Corralation between Samsung Electronics and Cairn Homes
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Cairn Homes. In addition to that, Samsung Electronics is 1.62 times more volatile than Cairn Homes PLC. It trades about -0.15 of its total potential returns per unit of risk. Cairn Homes PLC is currently generating about 0.05 per unit of volatility. If you would invest 16,620 in Cairn Homes PLC on August 28, 2024 and sell it today you would earn a total of 460.00 from holding Cairn Homes PLC or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Cairn Homes PLC
Performance |
| Timeline |
| Samsung Electronics |
| Cairn Homes PLC |
Samsung Electronics and Cairn Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Cairn Homes
The main advantage of trading using opposite Samsung Electronics and Cairn Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Cairn Homes 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 Cairn Homes will offset losses from the drop in Cairn Homes' long position.| Samsung Electronics vs. Cornish Metals | Samsung Electronics vs. Gaztransport et Technigaz | Samsung Electronics vs. Blackstone Loan Financing | Samsung Electronics vs. CAP LEASE AVIATION |
| Cairn Homes vs. Tungsten West PLC | Cairn Homes vs. Argo Group Limited | Cairn Homes vs. Hardide PLC | Cairn Homes vs. Versarien PLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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