Correlation Between Samsung Electronics and EVS Broadcast

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

Diversification Opportunities for Samsung Electronics and EVS Broadcast

0.45

Correlation Coefficient

Samsung Electronics  EVS Broadcast

Very weak diversification

The 3 months correlation between Samsung and EVS is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and EVS Broadcast Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVS Broadcast Equipment 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 EVS Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVS Broadcast Equipment has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and EVS Broadcast go up and down completely randomly.

Pair Corralation between Samsung Electronics and EVS Broadcast

Assuming the 90 days trading horizon Samsung Electronics is expected to generate 12.06 times less return on investment than EVS Broadcast. In addition to that, Samsung Electronics is 1.21 times more volatile than EVS Broadcast Equipment. It trades about 0.02 of its total potential returns per unit of risk. EVS Broadcast Equipment is currently generating about 0.27 per unit of volatility. If you would invest  2,850  in EVS Broadcast Equipment on December 4, 2024 and sell it today you would earn a total of  806.00  from holding EVS Broadcast Equipment or generate 28.28% 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.  EVS Broadcast Equipment

Samsung Electronics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Samsung Electronics is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

EVS Broadcast Equipment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EVS Broadcast Equipment are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, EVS Broadcast unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Electronics and EVS Broadcast

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

The idea behind Samsung Electronics Co and EVS Broadcast Equipment 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.