Correlation Between Samsung Electronics and Shell Plc
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Shell 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 Shell 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 Shell plc, you can compare the effects of market volatilities on Samsung Electronics and Shell 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 Shell Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Shell Plc.
Diversification Opportunities for Samsung Electronics and Shell Plc
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and Shell is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Shell plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shell 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 Shell Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shell plc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Shell Plc go up and down completely randomly.
Pair Corralation between Samsung Electronics and Shell Plc
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Shell Plc. In addition to that, Samsung Electronics is 1.89 times more volatile than Shell plc. It trades about -0.1 of its total potential returns per unit of risk. Shell plc is currently generating about -0.06 per unit of volatility. If you would invest 278,178 in Shell plc on September 1, 2024 and sell it today you would lose (25,028) from holding Shell plc or give up 9.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Samsung Electronics Co vs. Shell plc
Performance |
| Timeline |
| Samsung Electronics |
| Shell plc |
Samsung Electronics and Shell Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Shell Plc
The main advantage of trading using opposite Samsung Electronics and Shell Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Shell 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 Shell Plc will offset losses from the drop in Shell 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 |
| Shell Plc vs. Erste Group Bank | Shell Plc vs. Cairo Communication SpA | Shell Plc vs. Cincinnati Financial Corp | Shell Plc vs. Synchrony Financial |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |