Correlation Between Samsung Electronics and Accenture Plc
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Accenture 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 Accenture 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 Accenture plc, you can compare the effects of market volatilities on Samsung Electronics and Accenture 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 Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Accenture Plc.
Diversification Opportunities for Samsung Electronics and Accenture Plc
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Accenture is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture 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 Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Accenture Plc go up and down completely randomly.
Pair Corralation between Samsung Electronics and Accenture Plc
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.91 times more return on investment than Accenture Plc. However, Samsung Electronics is 1.91 times more volatile than Accenture plc. It trades about 0.1 of its potential returns per unit of risk. Accenture plc is currently generating about -0.21 per unit of risk. If you would invest 1,876,072 in Samsung Electronics Co on September 14, 2024 and sell it today you would earn a total of 69,678 from holding Samsung Electronics Co or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Samsung Electronics Co vs. Accenture plc
Performance |
| Timeline |
| Samsung Electronics |
| Accenture plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Samsung Electronics and Accenture Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Accenture Plc
The main advantage of trading using opposite Samsung Electronics and Accenture Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Accenture 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 Accenture Plc will offset losses from the drop in Accenture Plc's long position.The idea behind Samsung Electronics Co and Accenture plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Accenture Plc vs. Samsung Electronics Co | Accenture Plc vs. Delta Air Lines | Accenture Plc vs. Monster Beverage Corp | Accenture Plc vs. GMxico Transportes SAB |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |