Correlation Between Samsung Electronics and Calculus VCT

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

Diversification Opportunities for Samsung Electronics and Calculus VCT

0.37

Correlation Coefficient

Samsung Electronics  Calculus VCT

Weak diversification

The 3 months correlation between Samsung and Calculus is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Calculus VCT plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calculus VCT 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 Calculus VCT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calculus VCT plc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Calculus VCT go up and down completely randomly.

Pair Corralation between Samsung Electronics and Calculus VCT

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.72 times more return on investment than Calculus VCT. However, Samsung Electronics Co is 1.39 times less risky than Calculus VCT. It trades about -0.16 of its potential returns per unit of risk. Calculus VCT plc is currently generating about -0.22 per unit of risk. If you would invest  98,700  in Samsung Electronics Co on September 23, 2024 and sell it today you would lose (6,850) from holding Samsung Electronics Co or give up 6.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Samsung Electronics Co  vs.  Calculus VCT 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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Calculus VCT plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calculus VCT plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Samsung Electronics and Calculus VCT

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

The idea behind Samsung Electronics Co and Calculus VCT 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.