Correlation Between Samsung Electronics and GlobalData PLC
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and GlobalData PLC 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 GlobalData PLC 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 GlobalData PLC, you can compare the effects of market volatilities on Samsung Electronics and GlobalData PLC 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 GlobalData PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and GlobalData PLC.
Diversification Opportunities for Samsung Electronics and GlobalData PLC
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Samsung and GlobalData is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and GlobalData PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalData 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 GlobalData PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalData PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and GlobalData PLC go up and down completely randomly.
Pair Corralation between Samsung Electronics and GlobalData PLC
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.51 times more return on investment than GlobalData PLC. However, Samsung Electronics is 1.51 times more volatile than GlobalData PLC. It trades about 0.03 of its potential returns per unit of risk. GlobalData PLC is currently generating about -0.14 per unit of risk. If you would invest 93,650 in Samsung Electronics Co on September 13, 2024 and sell it today you would earn a total of 1,250 from holding Samsung Electronics Co or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. GlobalData PLC
Performance |
| Timeline |
| Samsung Electronics |
| GlobalData PLC |
Samsung Electronics and GlobalData PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and GlobalData PLC
The main advantage of trading using opposite Samsung Electronics and GlobalData PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, GlobalData PLC 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 GlobalData PLC will offset losses from the drop in GlobalData PLC's long position.| Samsung Electronics vs. Fidelity National Information | Samsung Electronics vs. Edita Food Industries | Samsung Electronics vs. Axfood AB | Samsung Electronics vs. Air Products Chemicals |
| GlobalData PLC vs. Samsung Electronics Co | GlobalData PLC vs. Samsung Electronics Co | GlobalData PLC vs. Hyundai Motor | GlobalData PLC 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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