Correlation Between Samsung Electronics and Pensionbee Group
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Pensionbee Group 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 Pensionbee Group 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 Pensionbee Group PLC, you can compare the effects of market volatilities on Samsung Electronics and Pensionbee Group 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 Pensionbee Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Pensionbee Group.
Diversification Opportunities for Samsung Electronics and Pensionbee Group
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Pensionbee is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Pensionbee Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pensionbee Group PLC 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 Pensionbee Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pensionbee Group PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Pensionbee Group go up and down completely randomly.
Pair Corralation between Samsung Electronics and Pensionbee Group
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Pensionbee Group. In addition to that, Samsung Electronics is 1.29 times more volatile than Pensionbee Group PLC. It trades about -0.14 of its total potential returns per unit of risk. Pensionbee Group PLC is currently generating about -0.1 per unit of volatility. If you would invest 16,950 in Pensionbee Group PLC on September 23, 2024 and sell it today you would lose (2,050) from holding Pensionbee Group PLC or give up 12.09% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. Pensionbee Group PLC
Performance |
Timeline |
Samsung Electronics |
Pensionbee Group PLC |
Samsung Electronics and Pensionbee Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and Pensionbee Group
The main advantage of trading using opposite Samsung Electronics and Pensionbee Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Pensionbee Group 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 Pensionbee Group will offset losses from the drop in Pensionbee Group's long position.Samsung Electronics vs. Air Products Chemicals | Samsung Electronics vs. Alliance Data Systems | Samsung Electronics vs. Erste Group Bank | Samsung Electronics vs. UNIQA Insurance Group |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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