Correlation Between Samsung Electronics and Dollar Tree
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Dollar Tree 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 Dollar Tree 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 Dollar Tree, you can compare the effects of market volatilities on Samsung Electronics and Dollar Tree 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 Dollar Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Dollar Tree.
Diversification Opportunities for Samsung Electronics and Dollar Tree
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samsung and Dollar is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Dollar Tree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar Tree 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 Dollar Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollar Tree has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Dollar Tree go up and down completely randomly.
Pair Corralation between Samsung Electronics and Dollar Tree
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Dollar Tree. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.05 times less risky than Dollar Tree. The stock trades about -0.16 of its potential returns per unit of risk. The Dollar Tree is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6,463 in Dollar Tree on September 10, 2024 and sell it today you would earn a total of 758.00 from holding Dollar Tree or generate 11.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. Dollar Tree
Performance |
Timeline |
Samsung Electronics |
Dollar Tree |
Samsung Electronics and Dollar Tree Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and Dollar Tree
The main advantage of trading using opposite Samsung Electronics and Dollar Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Dollar Tree 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 Dollar Tree will offset losses from the drop in Dollar Tree's long position.Samsung Electronics vs. Livermore Investments Group | Samsung Electronics vs. Nordic Semiconductor ASA | Samsung Electronics vs. Verizon Communications | Samsung Electronics vs. Batm Advanced Communications |
Dollar Tree vs. Southern Copper Corp | Dollar Tree vs. European Metals Holdings | Dollar Tree vs. Endeavour Mining Corp | Dollar Tree vs. McEwen Mining |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |