Correlation Between Samsung Electronics and RENTOKIL INITIAL
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and RENTOKIL INITIAL 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 RENTOKIL INITIAL 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 RENTOKIL INITIAL ADR5, you can compare the effects of market volatilities on Samsung Electronics and RENTOKIL INITIAL 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 RENTOKIL INITIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and RENTOKIL INITIAL.
Diversification Opportunities for Samsung Electronics and RENTOKIL INITIAL
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and RENTOKIL is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and RENTOKIL INITIAL ADR5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RENTOKIL INITIAL ADR5 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 RENTOKIL INITIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RENTOKIL INITIAL ADR5 has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and RENTOKIL INITIAL go up and down completely randomly.
Pair Corralation between Samsung Electronics and RENTOKIL INITIAL
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the RENTOKIL INITIAL. In addition to that, Samsung Electronics is 1.07 times more volatile than RENTOKIL INITIAL ADR5. It trades about -0.16 of its total potential returns per unit of risk. RENTOKIL INITIAL ADR5 is currently generating about -0.03 per unit of volatility. If you would invest 2,420 in RENTOKIL INITIAL ADR5 on September 23, 2024 and sell it today you would lose (40.00) from holding RENTOKIL INITIAL ADR5 or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. RENTOKIL INITIAL ADR5
Performance |
| Timeline |
| Samsung Electronics |
| RENTOKIL INITIAL ADR5 |
Samsung Electronics and RENTOKIL INITIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and RENTOKIL INITIAL
The main advantage of trading using opposite Samsung Electronics and RENTOKIL INITIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, RENTOKIL INITIAL 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 RENTOKIL INITIAL will offset losses from the drop in RENTOKIL INITIAL's long position.| Samsung Electronics vs. Computershare Limited | Samsung Electronics vs. AXWAY SOFTWARE EO | Samsung Electronics vs. United Internet AG | Samsung Electronics vs. Singapore Telecommunications Limited |
| RENTOKIL INITIAL vs. Cintas | RENTOKIL INITIAL vs. INPOST SA EO | RENTOKIL INITIAL vs. Elis SA | RENTOKIL INITIAL vs. PARK24 LTD |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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