Correlation Between Samsung Electronics and BlackRock Frontiers

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

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

Diversification Opportunities for Samsung Electronics and BlackRock Frontiers

-0.78

Correlation Coefficient

Samsung Electronics  BlackRock Frontiers

Pay attention - limited upside

The 3 months correlation between Samsung and BlackRock is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and BlackRock Frontiers Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Frontiers and Samsung Electronics 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 Samsung Electronics Co are associated (or correlated) with BlackRock Frontiers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Frontiers has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and BlackRock Frontiers go up and down completely randomly.

Pair Corralation between Samsung Electronics and BlackRock Frontiers

Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the BlackRock Frontiers. In addition to that, Samsung Electronics is 1.5 times more volatile than BlackRock Frontiers Investment. It trades about -0.05 of its total potential returns per unit of risk. BlackRock Frontiers Investment is currently generating about 0.04 per unit of volatility. If you would invest  13,194  in BlackRock Frontiers Investment on October 22, 2024 and sell it today you would earn a total of  2,206  from holding BlackRock Frontiers Investment or generate 16.72% return on investment over 90 days.

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

Samsung Electronics Co  vs.  BlackRock Frontiers Investment

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BlackRock Frontiers

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Frontiers Investment are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BlackRock Frontiers may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Samsung Electronics and BlackRock Frontiers

The main advantage of trading using opposite Samsung Electronics and BlackRock Frontiers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, BlackRock Frontiers 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 BlackRock Frontiers will offset losses from the drop in BlackRock Frontiers' long position.

The idea behind Samsung Electronics Co and BlackRock Frontiers Investment 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.