Correlation Between Samsung Electronics and Arcticzymes Technologies

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

Diversification Opportunities for Samsung Electronics and Arcticzymes Technologies

0.54

Correlation Coefficient

Samsung Electronics  Arcticzymes Technologies

Very weak diversification

The 3 months correlation between Samsung and Arcticzymes is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Arcticzymes Technologies ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcticzymes 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 Arcticzymes Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcticzymes Technologies has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Arcticzymes Technologies go up and down completely randomly.

Pair Corralation between Samsung Electronics and Arcticzymes Technologies

Assuming the 90 days trading horizon Samsung Electronics is expected to generate 8.75 times less return on investment than Arcticzymes Technologies. But when comparing it to its historical volatility, Samsung Electronics Co is 2.67 times less risky than Arcticzymes Technologies. It trades about 0.05 of its potential returns per unit of risk. Arcticzymes Technologies ASA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,394  in Arcticzymes Technologies ASA on December 2, 2024 and sell it today you would earn a total of  466.00  from holding Arcticzymes Technologies ASA or generate 33.43% return on investment over 90 days.

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

Samsung Electronics Co  vs.  Arcticzymes Technologies ASA

Samsung Electronics

Risk-Adjusted Performance

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 comparatively stable basic indicators, Samsung Electronics is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Arcticzymes Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Arcticzymes Technologies ASA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Arcticzymes Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Electronics and Arcticzymes Technologies

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

The idea behind Samsung Electronics Co and Arcticzymes Technologies ASA 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.