Correlation Between Quilter PLC and Samsung Electronics

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

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

Diversification Opportunities for Quilter PLC and Samsung Electronics

0.08

Correlation Coefficient

Quilter PLC  Samsung Electronics

Significant diversification

The 3 months correlation between Quilter and Samsung is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Quilter 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 Quilter PLC 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 Quilter 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 Quilter PLC i.e., Quilter PLC and Samsung Electronics go up and down completely randomly.

Pair Corralation between Quilter PLC and Samsung Electronics

Assuming the 90 days trading horizon Quilter PLC is expected to generate 69.8 times less return on investment than Samsung Electronics. But when comparing it to its historical volatility, Quilter PLC is 1.2 times less risky than Samsung Electronics. It trades about 0.0 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  93,800  in Samsung Electronics Co on December 4, 2024 and sell it today you would earn a total of  1,000.00  from holding Samsung Electronics Co or generate 1.07% return on investment over 90 days.

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

Quilter PLC  vs.  Samsung Electronics Co

Quilter PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quilter PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Quilter PLC is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Samsung Electronics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Samsung Electronics is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Quilter PLC and Samsung Electronics

The main advantage of trading using opposite Quilter PLC and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quilter PLC 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 Quilter 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.