Correlation Between MT Bank and Samsung Electronics

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

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

Diversification Opportunities for MT Bank and Samsung Electronics

-0.32

Correlation Coefficient

MT Bank  Samsung Electronics

Very good diversification

The 3 months correlation between 0JW2 and Samsung is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding MT Bank Corp and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and MT Bank 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 MT Bank Corp 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 MT Bank i.e., MT Bank and Samsung Electronics go up and down completely randomly.

Pair Corralation between MT Bank and Samsung Electronics

Assuming the 90 days trading horizon MT Bank Corp is expected to under-perform the Samsung Electronics. But the stock apears to be less risky and, when comparing its historical volatility, MT Bank Corp is 1.17 times less risky than Samsung Electronics. The stock trades about -0.4 of its potential returns per unit of risk. The Samsung Electronics Co is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  80,300  in Samsung Electronics Co on October 5, 2024 and sell it today you would lose (4,000) from holding Samsung Electronics Co or give up 4.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

MT Bank Corp  vs.  Samsung Electronics Co

MT Bank Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MT Bank Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, MT Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with MT Bank and Samsung Electronics

The main advantage of trading using opposite MT Bank and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MT Bank 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 MT Bank Corp 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.