Correlation Between SPECTRAL MEDICAL and Samsung Electronics

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

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

Diversification Opportunities for SPECTRAL MEDICAL and Samsung Electronics

0.6

Correlation Coefficient

SPECTRAL MEDICAL  Samsung Electronics

Poor diversification

The 3 months correlation between SPECTRAL and Samsung is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SPECTRAL MEDICAL and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and SPECTRAL MEDICAL 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 SPECTRAL MEDICAL 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 SPECTRAL MEDICAL i.e., SPECTRAL MEDICAL and Samsung Electronics go up and down completely randomly.

Pair Corralation between SPECTRAL MEDICAL and Samsung Electronics

Assuming the 90 days horizon SPECTRAL MEDICAL is expected to generate 1.01 times less return on investment than Samsung Electronics. In addition to that, SPECTRAL MEDICAL is 2.01 times more volatile than Samsung Electronics Co. It trades about 0.1 of its total potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.21 per unit of volatility. If you would invest  88,800  in Samsung Electronics Co on October 11, 2024 and sell it today you would earn a total of  6,200  from holding Samsung Electronics Co or generate 6.98% return on investment over 90 days.

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

SPECTRAL MEDICAL  vs.  Samsung Electronics Co

SPECTRAL MEDICAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPECTRAL MEDICAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SPECTRAL MEDICAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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. Despite nearly stable basic indicators, Samsung Electronics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SPECTRAL MEDICAL and Samsung Electronics

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