Correlation Between Samsung Electronics and Flora Growth
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Flora Growth 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 Flora Growth 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 Flora Growth Corp, you can compare the effects of market volatilities on Samsung Electronics and Flora Growth 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 Flora Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Flora Growth.
Diversification Opportunities for Samsung Electronics and Flora Growth
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Flora is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Flora Growth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flora Growth Corp 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 Flora Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flora Growth Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Flora Growth go up and down completely randomly.
Pair Corralation between Samsung Electronics and Flora Growth
Assuming the 90 days horizon Samsung Electronics is expected to generate 13.77 times less return on investment than Flora Growth. But when comparing it to its historical volatility, Samsung Electronics Co is 139.94 times less risky than Flora Growth. It trades about 0.09 of its potential returns per unit of risk. Flora Growth Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 500.00 in Flora Growth Corp on August 26, 2024 and sell it today you would lose (357.00) from holding Flora Growth Corp or give up 71.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Flora Growth Corp
Performance |
| Timeline |
| Samsung Electronics |
| Flora Growth Corp |
Samsung Electronics and Flora Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Flora Growth
The main advantage of trading using opposite Samsung Electronics and Flora Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Flora Growth 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 Flora Growth will offset losses from the drop in Flora Growth's long position.| Samsung Electronics vs. Copa Holdings SA | Samsung Electronics vs. United Airlines Holdings | Samsung Electronics vs. Delta Air Lines | Samsung Electronics vs. SkyWest |
| Flora Growth vs. Clever Leaves Holdings | Flora Growth vs. Painreform | Flora Growth vs. INC Research Holdings | Flora Growth vs. Lowell Farms |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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