Correlation Between Samsung Electronics and Wise Plc
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Wise Plc 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 Wise Plc 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 Wise plc, you can compare the effects of market volatilities on Samsung Electronics and Wise Plc 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 Wise Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Wise Plc.
Diversification Opportunities for Samsung Electronics and Wise Plc
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Wise is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Wise plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wise 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 Wise Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wise plc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Wise Plc go up and down completely randomly.
Pair Corralation between Samsung Electronics and Wise Plc
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Wise Plc. In addition to that, Samsung Electronics is 1.28 times more volatile than Wise plc. It trades about -0.13 of its total potential returns per unit of risk. Wise plc is currently generating about 0.34 per unit of volatility. If you would invest 63,000 in Wise plc on September 15, 2024 and sell it today you would earn a total of 30,700 from holding Wise plc or generate 48.73% 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. Wise plc
Performance |
Timeline |
Samsung Electronics |
Wise plc |
Samsung Electronics and Wise Plc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and Wise Plc
The main advantage of trading using opposite Samsung Electronics and Wise Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Wise Plc 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 Wise Plc will offset losses from the drop in Wise Plc's long position.Samsung Electronics vs. Zegona Communications Plc | Samsung Electronics vs. Universal Health Services | Samsung Electronics vs. Omega Healthcare Investors | Samsung Electronics vs. Orient Telecoms |
Wise Plc vs. Samsung Electronics Co | Wise Plc vs. Samsung Electronics Co | Wise Plc vs. Hyundai Motor | Wise Plc vs. Toyota Motor Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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