Correlation Between Samsung Electronics and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Maple Leaf 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 Maple Leaf 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 Maple Leaf Foods, you can compare the effects of market volatilities on Samsung Electronics and Maple Leaf 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 Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Maple Leaf.
Diversification Opportunities for Samsung Electronics and Maple Leaf
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Maple is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Maple Leaf Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Leaf Foods 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 Maple Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Leaf Foods has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Maple Leaf go up and down completely randomly.
Pair Corralation between Samsung Electronics and Maple Leaf
Assuming the 90 days horizon Samsung Electronics is expected to generate 3.04 times less return on investment than Maple Leaf. But when comparing it to its historical volatility, Samsung Electronics Co is 36.32 times less risky than Maple Leaf. It trades about 0.1 of its potential returns per unit of risk. Maple Leaf Foods is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,684 in Maple Leaf Foods on August 28, 2024 and sell it today you would lose (78.00) from holding Maple Leaf Foods or give up 4.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.15% |
| Values | Daily Returns |
Samsung Electronics Co vs. Maple Leaf Foods
Performance |
| Timeline |
| Samsung Electronics |
| Maple Leaf Foods |
Samsung Electronics and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Maple Leaf
The main advantage of trading using opposite Samsung Electronics and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Maple Leaf 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 Maple Leaf will offset losses from the drop in Maple Leaf'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 |
| Maple Leaf vs. Embotelladora Andina SA | Maple Leaf vs. Signet International Holdings | Maple Leaf vs. National Beverage Corp | Maple Leaf vs. PT Astra International |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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