Correlation Between Samsung Electronics and WICKES GROUP
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and WICKES GROUP 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 WICKES GROUP 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 WICKES GROUP PLC, you can compare the effects of market volatilities on Samsung Electronics and WICKES GROUP 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 WICKES GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and WICKES GROUP.
Diversification Opportunities for Samsung Electronics and WICKES GROUP
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samsung and WICKES is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and WICKES GROUP PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WICKES GROUP PLC 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 WICKES GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WICKES GROUP PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and WICKES GROUP go up and down completely randomly.
Pair Corralation between Samsung Electronics and WICKES GROUP
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the WICKES GROUP. In addition to that, Samsung Electronics is 1.05 times more volatile than WICKES GROUP PLC. It trades about -0.09 of its total potential returns per unit of risk. WICKES GROUP PLC is currently generating about 0.22 per unit of volatility. If you would invest 175.00 in WICKES GROUP PLC on October 31, 2024 and sell it today you would earn a total of 27.00 from holding WICKES GROUP PLC or generate 15.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. WICKES GROUP PLC
Performance |
| Timeline |
| Samsung Electronics |
| WICKES GROUP PLC |
Samsung Electronics and WICKES GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and WICKES GROUP
The main advantage of trading using opposite Samsung Electronics and WICKES GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, WICKES GROUP 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 WICKES GROUP will offset losses from the drop in WICKES GROUP's long position.| Samsung Electronics vs. Scandinavian Tobacco Group | Samsung Electronics vs. TAL Education Group | Samsung Electronics vs. WT OFFSHORE | Samsung Electronics vs. DEVRY EDUCATION GRP |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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