Correlation Between Samsung Electronics and Luceco Plc
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Luceco 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 Luceco 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 Luceco plc, you can compare the effects of market volatilities on Samsung Electronics and Luceco 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 Luceco Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Luceco Plc.
Diversification Opportunities for Samsung Electronics and Luceco Plc
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Luceco is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Luceco plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luceco 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 Luceco Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luceco plc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Luceco Plc go up and down completely randomly.
Pair Corralation between Samsung Electronics and Luceco Plc
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Luceco Plc. In addition to that, Samsung Electronics is 1.39 times more volatile than Luceco plc. It trades about -0.21 of its total potential returns per unit of risk. Luceco plc is currently generating about -0.14 per unit of volatility. If you would invest 15,147 in Luceco plc on August 31, 2024 and sell it today you would lose (2,307) from holding Luceco plc or give up 15.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Luceco plc
Performance |
| Timeline |
| Samsung Electronics |
| Luceco plc |
Samsung Electronics and Luceco Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Luceco Plc
The main advantage of trading using opposite Samsung Electronics and Luceco Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Luceco 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 Luceco Plc will offset losses from the drop in Luceco Plc's long position.| Samsung Electronics vs. The Investment | Samsung Electronics vs. Kinnevik Investment AB | Samsung Electronics vs. The Mercantile Investment | Samsung Electronics vs. Smithson Investment Trust |
| Luceco Plc vs. Lowland Investment Co | Luceco Plc vs. Cars Inc | Luceco Plc vs. The Mercantile Investment | Luceco Plc vs. Diversified Energy |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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