Correlation Between Samsung Electronics and Wilh Wilhelmsen
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Wilh Wilhelmsen 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 Wilh Wilhelmsen 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 Wilh Wilhelmsen Holding, you can compare the effects of market volatilities on Samsung Electronics and Wilh Wilhelmsen 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 Wilh Wilhelmsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Wilh Wilhelmsen.
Diversification Opportunities for Samsung Electronics and Wilh Wilhelmsen
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Wilh is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Wilh Wilhelmsen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilh Wilhelmsen Holding 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 Wilh Wilhelmsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilh Wilhelmsen Holding has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Wilh Wilhelmsen go up and down completely randomly.
Pair Corralation between Samsung Electronics and Wilh Wilhelmsen
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Wilh Wilhelmsen. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.89 times less risky than Wilh Wilhelmsen. The stock trades about -0.03 of its potential returns per unit of risk. The Wilh Wilhelmsen Holding is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,536 in Wilh Wilhelmsen Holding on August 25, 2024 and sell it today you would earn a total of 1,914 from holding Wilh Wilhelmsen Holding or generate 124.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Wilh Wilhelmsen Holding
Performance |
| Timeline |
| Samsung Electronics |
| Wilh Wilhelmsen Holding |
Samsung Electronics and Wilh Wilhelmsen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Wilh Wilhelmsen
The main advantage of trading using opposite Samsung Electronics and Wilh Wilhelmsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Wilh Wilhelmsen 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 Wilh Wilhelmsen will offset losses from the drop in Wilh Wilhelmsen's long position.| Samsung Electronics vs. Amazon Inc | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tesla Inc | Samsung Electronics vs. Alphabet Class A |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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