Correlation Between Samsung Electronics and Lords Grp
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Lords Grp 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 Lords Grp 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 Lords Grp Trading, you can compare the effects of market volatilities on Samsung Electronics and Lords Grp 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 Lords Grp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Lords Grp.
Diversification Opportunities for Samsung Electronics and Lords Grp
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Lords is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Lords Grp Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lords Grp Trading 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 Lords Grp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lords Grp Trading has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Lords Grp go up and down completely randomly.
Pair Corralation between Samsung Electronics and Lords Grp
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.87 times more return on investment than Lords Grp. However, Samsung Electronics Co is 1.15 times less risky than Lords Grp. It trades about 0.0 of its potential returns per unit of risk. Lords Grp Trading is currently generating about -0.05 per unit of risk. If you would invest 108,471 in Samsung Electronics Co on August 29, 2024 and sell it today you would lose (8,871) from holding Samsung Electronics Co or give up 8.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Lords Grp Trading
Performance |
| Timeline |
| Samsung Electronics |
| Lords Grp Trading |
Samsung Electronics and Lords Grp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Lords Grp
The main advantage of trading using opposite Samsung Electronics and Lords Grp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Lords Grp 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 Lords Grp will offset losses from the drop in Lords Grp's long position.| Samsung Electronics vs. Lundin Mining Corp | Samsung Electronics vs. Metals Exploration Plc | Samsung Electronics vs. Check Point Software | Samsung Electronics vs. GreenX Metals |
| Lords Grp vs. Bloomsbury Publishing Plc | Lords Grp vs. Science in Sport | Lords Grp vs. Bellevue Healthcare Trust | Lords Grp vs. Various Eateries 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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