Correlation Between Samsung Electronics and Eneraqua Technologies

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

Diversification Opportunities for Samsung Electronics and Eneraqua Technologies

-0.03

Correlation Coefficient

Samsung Electronics  Eneraqua Technologies

Good diversification

The 3 months correlation between Samsung and Eneraqua is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Eneraqua Technologies PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eneraqua Technologies 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 Eneraqua Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eneraqua Technologies PLC has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Eneraqua Technologies go up and down completely randomly.

Pair Corralation between Samsung Electronics and Eneraqua Technologies

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.35 times more return on investment than Eneraqua Technologies. However, Samsung Electronics Co is 2.89 times less risky than Eneraqua Technologies. It trades about -0.03 of its potential returns per unit of risk. Eneraqua Technologies PLC is currently generating about -0.05 per unit of risk. If you would invest  107,507  in Samsung Electronics Co on October 10, 2024 and sell it today you would lose (27,607) from holding Samsung Electronics Co or give up 25.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Samsung Electronics Co  vs.  Eneraqua Technologies PLC

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.

Eneraqua Technologies PLC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eneraqua Technologies PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Eneraqua Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Samsung Electronics and Eneraqua Technologies

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

The idea behind Samsung Electronics Co and Eneraqua Technologies 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.