Correlation Between Ping An and Samsung Electronics

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

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

Diversification Opportunities for Ping An and Samsung Electronics

0.33

Correlation Coefficient

Ping An  Samsung Electronics

Weak diversification

The 3 months correlation between Ping and Samsung is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Ping An 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 Ping An Insurance 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 Ping An i.e., Ping An and Samsung Electronics go up and down completely randomly.

Pair Corralation between Ping An and Samsung Electronics

Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Samsung Electronics. In addition to that, Ping An is 1.22 times more volatile than Samsung Electronics Co. It trades about 0.0 of its total potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.09 per unit of volatility. If you would invest  86,200  in Samsung Electronics Co on December 30, 2024 and sell it today you would earn a total of  8,200  from holding Samsung Electronics Co or generate 9.51% return on investment over 90 days.

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

Ping An Insurance  vs.  Samsung Electronics Co

Ping An Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ping An Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ping An is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Samsung Electronics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Samsung Electronics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ping An and Samsung Electronics

The main advantage of trading using opposite Ping An and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An 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 Ping An Insurance 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.