Correlation Between Samsung Electronics and L Catterton
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and L Catterton 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 L Catterton 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 L Catterton Asia, you can compare the effects of market volatilities on Samsung Electronics and L Catterton 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 L Catterton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and L Catterton.
Diversification Opportunities for Samsung Electronics and L Catterton
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and LCAA is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and L Catterton Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Catterton Asia 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 L Catterton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L Catterton Asia has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and L Catterton go up and down completely randomly.
Pair Corralation between Samsung Electronics and L Catterton
If you would invest 4,007 in Samsung Electronics Co on September 1, 2024 and sell it today you would earn a total of 53.00 from holding Samsung Electronics Co or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.53% |
| Values | Daily Returns |
Samsung Electronics Co vs. L Catterton Asia
Performance |
| Timeline |
| Samsung Electronics |
| L Catterton Asia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Samsung Electronics and L Catterton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and L Catterton
The main advantage of trading using opposite Samsung Electronics and L Catterton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, L Catterton 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 L Catterton will offset losses from the drop in L Catterton's long position.| Samsung Electronics vs. Universal Electronics | Samsung Electronics vs. Vizio Holding Corp | Samsung Electronics vs. VOXX International | Samsung Electronics vs. Sony Group 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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