Correlation Between Taylor Wimpey and Samsung Electronics

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

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

Diversification Opportunities for Taylor Wimpey and Samsung Electronics

-0.53

Correlation Coefficient

Taylor Wimpey  Samsung Electronics

Excellent diversification

The 3 months correlation between Taylor and Samsung is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Taylor Wimpey 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 Taylor Wimpey 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 Taylor Wimpey 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 Taylor Wimpey i.e., Taylor Wimpey and Samsung Electronics go up and down completely randomly.

Pair Corralation between Taylor Wimpey and Samsung Electronics

Assuming the 90 days trading horizon Taylor Wimpey PLC is expected to under-perform the Samsung Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Taylor Wimpey PLC is 1.13 times less risky than Samsung Electronics. The stock trades about -0.04 of its potential returns per unit of risk. The Samsung Electronics Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  80,071  in Samsung Electronics Co on April 25, 2025 and sell it today you would earn a total of  19,529  from holding Samsung Electronics Co or generate 24.39% return on investment over 90 days.

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

Taylor Wimpey PLC  vs.  Samsung Electronics Co

Taylor Wimpey PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taylor Wimpey PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Taylor Wimpey 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

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain essential indicators, Samsung Electronics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Taylor Wimpey and Samsung Electronics

The main advantage of trading using opposite Taylor Wimpey and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taylor Wimpey 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 Taylor Wimpey 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.