Correlation Between Samsung Electronics and Swire Properties
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Swire Properties 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 Swire Properties 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 Swire Properties Limited, you can compare the effects of market volatilities on Samsung Electronics and Swire Properties 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 Swire Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Swire Properties.
Diversification Opportunities for Samsung Electronics and Swire Properties
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Swire is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Swire Properties Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swire Properties 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 Swire Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swire Properties has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Swire Properties go up and down completely randomly.
Pair Corralation between Samsung Electronics and Swire Properties
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.89 times more return on investment than Swire Properties. However, Samsung Electronics is 1.89 times more volatile than Swire Properties Limited. It trades about 0.03 of its potential returns per unit of risk. Swire Properties Limited is currently generating about -0.05 per unit of risk. If you would invest 83,400 in Samsung Electronics Co on August 27, 2024 and sell it today you would earn a total of 800.00 from holding Samsung Electronics Co or generate 0.96% 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. Swire Properties Limited
Performance |
| Timeline |
| Samsung Electronics |
| Swire Properties |
Samsung Electronics and Swire Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Swire Properties
The main advantage of trading using opposite Samsung Electronics and Swire Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Swire Properties 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 Swire Properties will offset losses from the drop in Swire Properties' long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
| Swire Properties vs. COSTAR GROUP INC | Swire Properties vs. VONOVIA SE ADR | Swire Properties vs. Vonovia SE | Swire Properties vs. Wharf Real Estate |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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