Correlation Between Samsung Electronics and BUILDERS FIRSTSOURC
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and BUILDERS FIRSTSOURC 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 BUILDERS FIRSTSOURC 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 BUILDERS FIRSTSOURC, you can compare the effects of market volatilities on Samsung Electronics and BUILDERS FIRSTSOURC 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 BUILDERS FIRSTSOURC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and BUILDERS FIRSTSOURC.
Diversification Opportunities for Samsung Electronics and BUILDERS FIRSTSOURC
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and BUILDERS is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and BUILDERS FIRSTSOURC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BUILDERS FIRSTSOURC 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 BUILDERS FIRSTSOURC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BUILDERS FIRSTSOURC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and BUILDERS FIRSTSOURC go up and down completely randomly.
Pair Corralation between Samsung Electronics and BUILDERS FIRSTSOURC
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the BUILDERS FIRSTSOURC. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.38 times less risky than BUILDERS FIRSTSOURC. The stock trades about -0.02 of its potential returns per unit of risk. The BUILDERS FIRSTSOURC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 11,185 in BUILDERS FIRSTSOURC on September 4, 2024 and sell it today you would earn a total of 6,635 from holding BUILDERS FIRSTSOURC or generate 59.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. BUILDERS FIRSTSOURC
Performance |
| Timeline |
| Samsung Electronics |
| BUILDERS FIRSTSOURC |
Samsung Electronics and BUILDERS FIRSTSOURC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and BUILDERS FIRSTSOURC
The main advantage of trading using opposite Samsung Electronics and BUILDERS FIRSTSOURC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, BUILDERS FIRSTSOURC 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 BUILDERS FIRSTSOURC will offset losses from the drop in BUILDERS FIRSTSOURC's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
| BUILDERS FIRSTSOURC vs. TYSON FOODS A | BUILDERS FIRSTSOURC vs. Premier Foods PLC | BUILDERS FIRSTSOURC vs. VIAPLAY GROUP AB | BUILDERS FIRSTSOURC vs. ePlay Digital |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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