Correlation Between Samsung Electronics and 311960

Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and 311960 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 311960 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 311960, you can compare the effects of market volatilities on Samsung Electronics and 311960 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 311960. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and 311960.

Diversification Opportunities for Samsung Electronics and 311960

-0.76

Correlation Coefficient

Samsung Electronics  311960

Pay attention - limited upside

The 3 months correlation between Samsung and 311960 is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and 311960 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 311960 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 311960. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 311960 has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and 311960 go up and down completely randomly.

Pair Corralation between Samsung Electronics and 311960

Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the 311960. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 3.26 times less risky than 311960. The stock trades about -0.21 of its potential returns per unit of risk. The 311960 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  434,500  in 311960 on September 26, 2024 and sell it today you would lose (5,000) from holding 311960 or give up 1.15% of portfolio value over 90 days.

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

Samsung Electronics Co  vs.  311960

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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

311960

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 311960 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 311960 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Electronics and 311960

The main advantage of trading using opposite Samsung Electronics and 311960 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, 311960 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 311960 will offset losses from the drop in 311960's long position.

The idea behind Samsung Electronics Co and 311960 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.