Correlation Between Mulberry Group and Samsung Electronics

Can any of the company-specific risk be diversified away by investing in both Mulberry Group and Samsung Electronics 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 Mulberry Group and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mulberry Group PLC and Samsung Electronics Co, you can compare the effects of market volatilities on Mulberry Group and Samsung Electronics 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 Mulberry Group with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mulberry Group and Samsung Electronics.

Diversification Opportunities for Mulberry Group and Samsung Electronics

-0.02

Correlation Coefficient

Mulberry Group  Samsung Electronics

Good diversification

The 3 months correlation between Mulberry and Samsung is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Mulberry Group 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 Mulberry Group PLC are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Mulberry Group i.e., Mulberry Group and Samsung Electronics go up and down completely randomly.

Pair Corralation between Mulberry Group and Samsung Electronics

Assuming the 90 days trading horizon Mulberry Group PLC is expected to under-perform the Samsung Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Mulberry Group PLC is 1.01 times less risky than Samsung Electronics. The stock trades about -0.08 of its potential returns per unit of risk. The Samsung Electronics Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  76,500  in Samsung Electronics Co on December 23, 2024 and sell it today you would earn a total of  8,500  from holding Samsung Electronics Co or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mulberry Group PLC  vs.  Samsung Electronics Co

Mulberry Group PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mulberry Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Samsung Electronics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Samsung Electronics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Mulberry Group and Samsung Electronics

The main advantage of trading using opposite Mulberry Group and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mulberry Group position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.

The idea behind Mulberry Group PLC and Samsung Electronics Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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.