Correlation Between Samsung Electronics and GlobalData PLC

Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and GlobalData PLC 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 GlobalData PLC 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 GlobalData PLC, you can compare the effects of market volatilities on Samsung Electronics and GlobalData PLC 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 GlobalData PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and GlobalData PLC.

Diversification Opportunities for Samsung Electronics and GlobalData PLC

-0.27

Correlation Coefficient

Samsung Electronics  GlobalData PLC

Very good diversification

The 3 months correlation between Samsung and GlobalData is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and GlobalData PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalData PLC 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 GlobalData PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalData PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and GlobalData PLC go up and down completely randomly.

Pair Corralation between Samsung Electronics and GlobalData PLC

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.8 times more return on investment than GlobalData PLC. However, Samsung Electronics Co is 1.25 times less risky than GlobalData PLC. It trades about 0.09 of its potential returns per unit of risk. GlobalData PLC is currently generating about -0.13 per unit of risk. If you would invest  75,100  in Samsung Electronics Co on December 30, 2024 and sell it today you would earn a total of  7,400  from holding Samsung Electronics Co or generate 9.85% return on investment over 90 days.

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

Samsung Electronics Co  vs.  GlobalData PLC

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 6 (%) 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.

GlobalData PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days GlobalData PLC 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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Samsung Electronics and GlobalData PLC

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

The idea behind Samsung Electronics Co and GlobalData PLC 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.