Correlation Between Samsung Electronics and Unilever PLC
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Unilever 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 Unilever 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 Unilever PLC, you can compare the effects of market volatilities on Samsung Electronics and Unilever 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 Unilever PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Unilever PLC.
Diversification Opportunities for Samsung Electronics and Unilever PLC
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Unilever is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Unilever PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever 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 Unilever PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Unilever PLC go up and down completely randomly.
Pair Corralation between Samsung Electronics and Unilever PLC
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Unilever PLC. In addition to that, Samsung Electronics is 1.94 times more volatile than Unilever PLC. It trades about -0.01 of its total potential returns per unit of risk. Unilever PLC is currently generating about 0.05 per unit of volatility. If you would invest 388,388 in Unilever PLC on August 27, 2024 and sell it today you would earn a total of 80,812 from holding Unilever PLC or generate 20.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Unilever PLC
Performance |
| Timeline |
| Samsung Electronics |
| Unilever PLC |
Samsung Electronics and Unilever PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Unilever PLC
The main advantage of trading using opposite Samsung Electronics and Unilever PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Unilever 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 Unilever PLC will offset losses from the drop in Unilever PLC's long position.| Samsung Electronics vs. Futura Medical | Samsung Electronics vs. Evolution Gaming Group | Samsung Electronics vs. Games Workshop Group | Samsung Electronics vs. AMG Advanced Metallurgical |
| Unilever PLC vs. Samsung Electronics Co | Unilever PLC vs. Samsung Electronics Co | Unilever PLC vs. Hyundai Motor | Unilever 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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