Correlation Between Samsung Electronics and Guidewire Software
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Guidewire Software 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 Guidewire Software 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 Guidewire Software, you can compare the effects of market volatilities on Samsung Electronics and Guidewire Software 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 Guidewire Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Guidewire Software.
Diversification Opportunities for Samsung Electronics and Guidewire Software
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Guidewire is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Guidewire Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidewire Software 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 Guidewire Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidewire Software has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Guidewire Software go up and down completely randomly.
Pair Corralation between Samsung Electronics and Guidewire Software
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Guidewire Software. In addition to that, Samsung Electronics is 1.53 times more volatile than Guidewire Software. It trades about -0.12 of its total potential returns per unit of risk. Guidewire Software is currently generating about 0.34 per unit of volatility. If you would invest 13,175 in Guidewire Software on September 2, 2024 and sell it today you would earn a total of 5,890 from holding Guidewire Software or generate 44.71% 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. Guidewire Software
Performance |
| Timeline |
| Samsung Electronics |
| Guidewire Software |
Samsung Electronics and Guidewire Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Guidewire Software
The main advantage of trading using opposite Samsung Electronics and Guidewire Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Guidewire Software 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 Guidewire Software will offset losses from the drop in Guidewire Software's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
| Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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