Correlation Between Bertrandt and Samsung Electronics

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

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

Diversification Opportunities for Bertrandt and Samsung Electronics

0.28

Correlation Coefficient

Bertrandt  Samsung Electronics

Modest diversification

The 3 months correlation between Bertrandt and Samsung is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bertrandt AG and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Bertrandt 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 Bertrandt AG 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 Bertrandt i.e., Bertrandt and Samsung Electronics go up and down completely randomly.

Pair Corralation between Bertrandt and Samsung Electronics

Assuming the 90 days trading horizon Bertrandt AG is expected to generate 1.71 times more return on investment than Samsung Electronics. However, Bertrandt is 1.71 times more volatile than Samsung Electronics Co. It trades about 0.21 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.04 per unit of risk. If you would invest  1,766  in Bertrandt AG on December 2, 2024 and sell it today you would earn a total of  849.00  from holding Bertrandt AG or generate 48.07% return on investment over 90 days.

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

Bertrandt AG  vs.  Samsung Electronics Co

Bertrandt AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bertrandt AG are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Bertrandt unveiled solid returns over the last few months and may actually be approaching a breakup point.

Samsung Electronics

Risk-Adjusted Performance

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 comparatively stable basic indicators, Samsung Electronics is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bertrandt and Samsung Electronics

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

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.