Correlation Between Samsung Electronics and Raphas

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

Diversification Opportunities for Samsung Electronics and Raphas

0.74

Correlation Coefficient

Samsung Electronics  Raphas

Poor diversification

The 3 months correlation between Samsung and Raphas is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Raphas Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raphas 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 Raphas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raphas has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Raphas go up and down completely randomly.

Pair Corralation between Samsung Electronics and Raphas

Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Raphas. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 2.18 times less risky than Raphas. The stock trades about -0.04 of its potential returns per unit of risk. The Raphas Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,471,000  in Raphas Co on October 23, 2024 and sell it today you would earn a total of  15,000  from holding Raphas Co or generate 1.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

Samsung Electronics Co  vs.  Raphas Co

Samsung Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samsung Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Raphas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Raphas Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Samsung Electronics and Raphas

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

The idea behind Samsung Electronics Co and Raphas 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.