Correlation Between Samsung Electronics and Sonos
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sonos 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 Sonos 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 Sonos Inc, you can compare the effects of market volatilities on Samsung Electronics and Sonos 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 Sonos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sonos.
Diversification Opportunities for Samsung Electronics and Sonos
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Sonos is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sonos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonos Inc 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 Sonos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonos Inc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sonos go up and down completely randomly.
Pair Corralation between Samsung Electronics and Sonos
Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.02 times more return on investment than Sonos. However, Samsung Electronics Co is 41.1 times less risky than Sonos. It trades about 0.1 of its potential returns per unit of risk. Sonos Inc is currently generating about -0.01 per unit of risk. If you would invest 3,925 in Samsung Electronics Co on August 27, 2024 and sell it today you would earn a total of 135.00 from holding Samsung Electronics Co or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Sonos Inc
Performance |
| Timeline |
| Samsung Electronics |
| Sonos Inc |
Samsung Electronics and Sonos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Sonos
The main advantage of trading using opposite Samsung Electronics and Sonos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sonos 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 Sonos will offset losses from the drop in Sonos' long position.| Samsung Electronics vs. Universal Electronics | Samsung Electronics vs. Vizio Holding Corp | Samsung Electronics vs. VOXX International | Samsung Electronics vs. Sony Group Corp |
| Sonos vs. VOXX International | Sonos vs. LG Display Co | Sonos vs. Vizio Holding Corp | Sonos vs. Wearable Devices |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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