Correlation Between Samsung Electronics and Carnival Plc
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Carnival Plc 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 Carnival Plc 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 Carnival plc, you can compare the effects of market volatilities on Samsung Electronics and Carnival Plc 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 Carnival Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Carnival Plc.
Diversification Opportunities for Samsung Electronics and Carnival Plc
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Carnival is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Carnival plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnival 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 Carnival Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnival plc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Carnival Plc go up and down completely randomly.
Pair Corralation between Samsung Electronics and Carnival Plc
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the Carnival Plc. In addition to that, Samsung Electronics is 1.08 times more volatile than Carnival plc. It trades about -0.04 of its total potential returns per unit of risk. Carnival plc is currently generating about 0.29 per unit of volatility. If you would invest 2,045 in Carnival plc on August 31, 2024 and sell it today you would earn a total of 355.00 from holding Carnival plc or generate 17.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Carnival plc
Performance |
| Timeline |
| Samsung Electronics |
| Carnival plc |
Samsung Electronics and Carnival Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Carnival Plc
The main advantage of trading using opposite Samsung Electronics and Carnival Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Carnival Plc 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 Carnival Plc will offset losses from the drop in Carnival Plc's long position.| Samsung Electronics vs. Fukuyama Transporting Co | Samsung Electronics vs. KAUFMAN ET BROAD | Samsung Electronics vs. The Hanover Insurance | Samsung Electronics vs. Goosehead Insurance |
| Carnival Plc vs. Li Ning Company | Carnival Plc vs. Trip Group Limited | Carnival Plc vs. Superior Plus Corp | Carnival Plc vs. NMI Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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