Correlation Between Samsung Electronics and Wizz Air
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Wizz Air 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 Wizz Air 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 Wizz Air Holdings, you can compare the effects of market volatilities on Samsung Electronics and Wizz Air 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 Wizz Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Wizz Air.
Diversification Opportunities for Samsung Electronics and Wizz Air
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samsung and Wizz is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Wizz Air Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wizz Air Holdings 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 Wizz Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wizz Air Holdings has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Wizz Air go up and down completely randomly.
Pair Corralation between Samsung Electronics and Wizz Air
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.56 times more return on investment than Wizz Air. However, Samsung Electronics Co is 1.8 times less risky than Wizz Air. It trades about 0.0 of its potential returns per unit of risk. Wizz Air Holdings is currently generating about -0.02 per unit of risk. If you would invest 110,845 in Samsung Electronics Co on November 28, 2024 and sell it today you would lose (11,845) from holding Samsung Electronics Co or give up 10.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Wizz Air Holdings
Performance |
| Timeline |
| Samsung Electronics |
| Wizz Air Holdings |
Samsung Electronics and Wizz Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Wizz Air
The main advantage of trading using opposite Samsung Electronics and Wizz Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Wizz Air 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 Wizz Air will offset losses from the drop in Wizz Air's long position.| Samsung Electronics vs. Metals Exploration Plc | Samsung Electronics vs. Central Asia Metals | Samsung Electronics vs. Young Cos Brewery | Samsung Electronics vs. Wheaton Precious Metals |
| Wizz Air vs. Cairo Communication SpA | Wizz Air vs. Spirent Communications plc | Wizz Air vs. Endeavour Mining Corp | Wizz Air vs. Fortuna Silver Mines |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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