Correlation Between Samsung Electronics and Rosslyn Data

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

Diversification Opportunities for Samsung Electronics and Rosslyn Data

0.62

Correlation Coefficient

Samsung Electronics  Rosslyn Data

Poor diversification

The 3 months correlation between Samsung and Rosslyn is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Rosslyn Data Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rosslyn Data Technologies 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 Rosslyn Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rosslyn Data Technologies has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Rosslyn Data go up and down completely randomly.

Pair Corralation between Samsung Electronics and Rosslyn Data

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.33 times more return on investment than Rosslyn Data. However, Samsung Electronics is 1.33 times more volatile than Rosslyn Data Technologies. It trades about 0.04 of its potential returns per unit of risk. Rosslyn Data Technologies is currently generating about -0.39 per unit of risk. If you would invest  78,900  in Samsung Electronics Co on October 10, 2024 and sell it today you would earn a total of  900.00  from holding Samsung Electronics Co or generate 1.14% return on investment over 90 days.

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

Samsung Electronics Co  vs.  Rosslyn Data Technologies

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.

Rosslyn Data Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rosslyn Data Technologies 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Samsung Electronics and Rosslyn Data

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

The idea behind Samsung Electronics Co and Rosslyn Data Technologies 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.