Correlation Between Samsung Electronics and Young Poong

Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Young Poong 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 Young Poong 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 Young Poong Corp, you can compare the effects of market volatilities on Samsung Electronics and Young Poong 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 Young Poong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Young Poong.

Diversification Opportunities for Samsung Electronics and Young Poong

0.41

Correlation Coefficient

Samsung Electronics  Young Poong

Very weak diversification

The 3 months correlation between Samsung and Young is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Young Poong Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Young Poong Corp 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 Young Poong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Young Poong Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Young Poong go up and down completely randomly.

Pair Corralation between Samsung Electronics and Young Poong

Assuming the 90 days trading horizon Samsung Electronics is expected to generate 1.89 times less return on investment than Young Poong. But when comparing it to its historical volatility, Samsung Electronics Co is 1.38 times less risky than Young Poong. It trades about 0.12 of its potential returns per unit of risk. Young Poong Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  39,376,800  in Young Poong Corp on December 24, 2024 and sell it today you would earn a total of  8,973,200  from holding Young Poong Corp or generate 22.79% return on investment over 90 days.

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

Samsung Electronics Co  vs.  Young Poong Corp

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 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samsung Electronics sustained solid returns over the last few months and may actually be approaching a breakup point.

Young Poong Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Young Poong Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Young Poong sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Electronics and Young Poong

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

The idea behind Samsung Electronics Co and Young Poong Corp 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.