Correlation Between Samsung Electronics and Veolia Environnement

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Veolia Environnement 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 Veolia Environnement 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 Veolia Environnement VE, you can compare the effects of market volatilities on Samsung Electronics and Veolia Environnement 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 Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Veolia Environnement.

Diversification Opportunities for Samsung Electronics and Veolia Environnement

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Samsung and Veolia is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Veolia Environnement VE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement 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 Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Veolia Environnement go up and down completely randomly.

Pair Corralation between Samsung Electronics and Veolia Environnement

Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Veolia Environnement. In addition to that, Samsung Electronics is 1.54 times more volatile than Veolia Environnement VE. It trades about -0.01 of its total potential returns per unit of risk. Veolia Environnement VE is currently generating about 0.04 per unit of volatility. If you would invest  2,252  in Veolia Environnement VE on September 5, 2024 and sell it today you would earn a total of  490.00  from holding Veolia Environnement VE or generate 21.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Samsung Electronics Co  vs.  Veolia Environnement VE

 Performance 
       Timeline  
Samsung Electronics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Samsung Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Veolia Environnement 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Veolia Environnement VE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Samsung Electronics and Veolia Environnement Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Samsung Electronics and Veolia Environnement

The main advantage of trading using opposite Samsung Electronics and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.
The idea behind Samsung Electronics Co and Veolia Environnement VE 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

Other Complementary Tools

Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Transaction History
View history of all your transactions and understand their impact on performance
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings