Correlation Between Samsung Electronics and George Weston
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and George Weston 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 George Weston 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 George Weston Limited, you can compare the effects of market volatilities on Samsung Electronics and George Weston 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 George Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and George Weston.
Diversification Opportunities for Samsung Electronics and George Weston
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and George is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and George Weston Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Weston Limited 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 George Weston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Weston Limited has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and George Weston go up and down completely randomly.
Pair Corralation between Samsung Electronics and George Weston
Assuming the 90 days horizon Samsung Electronics is expected to generate 10.2 times less return on investment than George Weston. But when comparing it to its historical volatility, Samsung Electronics Co is 26.26 times less risky than George Weston. It trades about 0.1 of its potential returns per unit of risk. George Weston Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 12,716 in George Weston Limited on August 30, 2024 and sell it today you would earn a total of 3,067 from holding George Weston Limited or generate 24.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 80.2% |
| Values | Daily Returns |
Samsung Electronics Co vs. George Weston Limited
Performance |
| Timeline |
| Samsung Electronics |
| George Weston Limited |
Samsung Electronics and George Weston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and George Weston
The main advantage of trading using opposite Samsung Electronics and George Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, George Weston 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 George Weston will offset losses from the drop in George Weston'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 |
| George Weston vs. Embotelladora Andina SA | George Weston vs. Signet International Holdings | George Weston vs. National Beverage Corp | George Weston 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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