Correlation Between Samsung Electronics and Haleon PLC
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Haleon 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 Haleon 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 Haleon PLC, you can compare the effects of market volatilities on Samsung Electronics and Haleon 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 Haleon PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Haleon PLC.
Diversification Opportunities for Samsung Electronics and Haleon PLC
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Haleon is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Haleon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon 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 Haleon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Haleon PLC go up and down completely randomly.
Pair Corralation between Samsung Electronics and Haleon PLC
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Haleon PLC. In addition to that, Samsung Electronics is 3.41 times more volatile than Haleon PLC. It trades about -0.09 of its total potential returns per unit of risk. Haleon PLC is currently generating about 0.03 per unit of volatility. If you would invest 37,240 in Haleon PLC on September 1, 2024 and sell it today you would earn a total of 190.00 from holding Haleon PLC or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. Haleon PLC
Performance |
| Timeline |
| Samsung Electronics |
| Haleon PLC |
Samsung Electronics and Haleon PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Haleon PLC
The main advantage of trading using opposite Samsung Electronics and Haleon PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Haleon 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 Haleon PLC will offset losses from the drop in Haleon PLC's 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 |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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