Correlation Between REGAL ASIAN and Samsung Electronics

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

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

Diversification Opportunities for REGAL ASIAN and Samsung Electronics

0.41

Correlation Coefficient

REGAL ASIAN  Samsung Electronics

Very weak diversification

The 3 months correlation between REGAL and Samsung is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and REGAL ASIAN 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 REGAL ASIAN INVESTMENTS 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 REGAL ASIAN i.e., REGAL ASIAN and Samsung Electronics go up and down completely randomly.

Pair Corralation between REGAL ASIAN and Samsung Electronics

Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to under-perform the Samsung Electronics. But the stock apears to be less risky and, when comparing its historical volatility, REGAL ASIAN INVESTMENTS is 1.53 times less risky than Samsung Electronics. The stock trades about -0.1 of its potential returns per unit of risk. The Samsung Electronics Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  87,800  in Samsung Electronics Co on December 29, 2024 and sell it today you would earn a total of  5,400  from holding Samsung Electronics Co or generate 6.15% return on investment over 90 days.

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

REGAL ASIAN INVESTMENTS  vs.  Samsung Electronics Co

REGAL ASIAN INVESTMENTS

Risk-Adjusted Performance

Very Weak

Over the last 90 days REGAL ASIAN INVESTMENTS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Samsung Electronics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Samsung Electronics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with REGAL ASIAN and Samsung Electronics

The main advantage of trading using opposite REGAL ASIAN and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN 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 REGAL ASIAN INVESTMENTS 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.