Correlation Between Samsung Card and Sugentech

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

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

Diversification Opportunities for Samsung Card and Sugentech

-0.39

Correlation Coefficient

Samsung Card  Sugentech

Very good diversification

The 3 months correlation between Samsung and Sugentech is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Card Co and Sugentech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sugentech and Samsung Card 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 Card Co are associated (or correlated) with Sugentech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sugentech has no effect on the direction of Samsung Card i.e., Samsung Card and Sugentech go up and down completely randomly.

Pair Corralation between Samsung Card and Sugentech

Assuming the 90 days trading horizon Samsung Card is expected to generate 2.38 times less return on investment than Sugentech. But when comparing it to its historical volatility, Samsung Card Co is 4.91 times less risky than Sugentech. It trades about 0.11 of its potential returns per unit of risk. Sugentech is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  503,000  in Sugentech on December 26, 2024 and sell it today you would earn a total of  51,000  from holding Sugentech or generate 10.14% return on investment over 90 days.

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

Samsung Card Co  vs.  Sugentech

Samsung Card

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Card Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samsung Card may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Sugentech

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sugentech are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sugentech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Card and Sugentech

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

The idea behind Samsung Card Co and Sugentech 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.