Correlation Between Samsung Electronics and Walgreens Boots
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Walgreens Boots 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 Walgreens Boots 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 Walgreens Boots Alliance, you can compare the effects of market volatilities on Samsung Electronics and Walgreens Boots 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 Walgreens Boots. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Walgreens Boots.
Diversification Opportunities for Samsung Electronics and Walgreens Boots
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Walgreens is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Walgreens Boots Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walgreens Boots Alliance 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 Walgreens Boots. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walgreens Boots Alliance has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Walgreens Boots go up and down completely randomly.
Pair Corralation between Samsung Electronics and Walgreens Boots
Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.7 times more return on investment than Walgreens Boots. However, Samsung Electronics Co is 1.42 times less risky than Walgreens Boots. It trades about -0.03 of its potential returns per unit of risk. Walgreens Boots Alliance is currently generating about -0.09 per unit of risk. If you would invest 124,024 in Samsung Electronics Co on September 4, 2024 and sell it today you would lose (32,024) from holding Samsung Electronics Co or give up 25.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Walgreens Boots Alliance
Performance |
| Timeline |
| Samsung Electronics |
| Walgreens Boots Alliance |
Samsung Electronics and Walgreens Boots Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Walgreens Boots
The main advantage of trading using opposite Samsung Electronics and Walgreens Boots positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Walgreens Boots 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 Walgreens Boots will offset losses from the drop in Walgreens Boots' long position.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Xiaomi | Samsung Electronics vs. Panasonic Corp |
| Walgreens Boots vs. Commonwealth Bank of | Walgreens Boots vs. Aozora Bank | Walgreens Boots vs. OAKTRSPECLENDNEW | Walgreens Boots vs. Southwest Airlines Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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