Correlation Between Samsung Electronics and Ashtead Technology

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

Diversification Opportunities for Samsung Electronics and Ashtead Technology

0.0

Correlation Coefficient

Samsung Electronics  Ashtead Technology

Pay attention - limited upside

The 3 months correlation between Samsung and Ashtead is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Ashtead Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Technology 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 Ashtead Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashtead Technology has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Ashtead Technology go up and down completely randomly.

Pair Corralation between Samsung Electronics and Ashtead Technology

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.67 times more return on investment than Ashtead Technology. However, Samsung Electronics Co is 1.5 times less risky than Ashtead Technology. It trades about 0.09 of its potential returns per unit of risk. Ashtead Technology Holdings is currently generating about 0.0 per unit of risk. If you would invest  91,000  in Samsung Electronics Co on December 31, 2024 and sell it today you would earn a total of  9,500  from holding Samsung Electronics Co or generate 10.44% return on investment over 90 days.

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

Samsung Electronics Co  vs.  Ashtead Technology Holdings

Samsung Electronics

Risk-Adjusted Performance

OK

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 May 2025.

Ashtead Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ashtead Technology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Ashtead Technology is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Samsung Electronics and Ashtead Technology

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

The idea behind Samsung Electronics Co and Ashtead Technology Holdings 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.