Correlation Between Samsung Electronics and Lendlease
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Lendlease 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 Lendlease 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 Lendlease Group, you can compare the effects of market volatilities on Samsung Electronics and Lendlease 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 Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Lendlease.
Diversification Opportunities for Samsung Electronics and Lendlease
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and Lendlease is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group 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 Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Lendlease go up and down completely randomly.
Pair Corralation between Samsung Electronics and Lendlease
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Lendlease. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.12 times less risky than Lendlease. The stock trades about 0.0 of its potential returns per unit of risk. The Lendlease Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 442.00 in Lendlease Group on August 25, 2024 and sell it today you would lose (38.00) from holding Lendlease Group or give up 8.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Lendlease Group
Performance |
| Timeline |
| Samsung Electronics |
| Lendlease Group |
Samsung Electronics and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Lendlease
The main advantage of trading using opposite Samsung Electronics and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Lendlease 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 Lendlease will offset losses from the drop in Lendlease's long position.| Samsung Electronics vs. Amazon Inc | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tesla Inc | Samsung Electronics vs. Alphabet Class A |
| Lendlease vs. Big 5 Sporting | Lendlease vs. Electronic Arts | Lendlease vs. Samsung Electronics Co | Lendlease vs. ALERION CLEANPOWER |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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