Correlation Between Eneraqua Technologies and Samsung Electronics

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

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

Diversification Opportunities for Eneraqua Technologies and Samsung Electronics

-0.17

Correlation Coefficient

Eneraqua Technologies  Samsung Electronics

Good diversification

The 3 months correlation between Eneraqua and Samsung is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Eneraqua Technologies PLC and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Eneraqua Technologies 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 Eneraqua Technologies PLC 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 Eneraqua Technologies i.e., Eneraqua Technologies and Samsung Electronics go up and down completely randomly.

Pair Corralation between Eneraqua Technologies and Samsung Electronics

Assuming the 90 days trading horizon Eneraqua Technologies PLC is expected to generate 1.2 times more return on investment than Samsung Electronics. However, Eneraqua Technologies is 1.2 times more volatile than Samsung Electronics Co. It trades about 0.03 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.06 per unit of risk. If you would invest  4,000  in Eneraqua Technologies PLC on October 10, 2024 and sell it today you would earn a total of  100.00  from holding Eneraqua Technologies PLC or generate 2.5% return on investment over 90 days.

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

Eneraqua Technologies PLC  vs.  Samsung Electronics Co

Eneraqua Technologies PLC

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eneraqua Technologies PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Eneraqua Technologies is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Eneraqua Technologies and Samsung Electronics

The main advantage of trading using opposite Eneraqua Technologies and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eneraqua Technologies 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 Eneraqua Technologies PLC 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.