Correlation Between Samsung Electronics and Gaming Realms

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

Diversification Opportunities for Samsung Electronics and Gaming Realms

-0.26

Correlation Coefficient

Samsung Electronics  Gaming Realms

Very good diversification

The 3 months correlation between Samsung and Gaming is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Gaming Realms plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Realms 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 Gaming Realms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Realms plc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Gaming Realms go up and down completely randomly.

Pair Corralation between Samsung Electronics and Gaming Realms

Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Gaming Realms. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.33 times less risky than Gaming Realms. The stock trades about -0.01 of its potential returns per unit of risk. The Gaming Realms plc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,523  in Gaming Realms plc on October 21, 2024 and sell it today you would earn a total of  957.00  from holding Gaming Realms plc or generate 37.93% return on investment over 90 days.

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

Samsung Electronics Co  vs.  Gaming Realms 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 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.

Gaming Realms plc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gaming Realms plc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Gaming Realms may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Samsung Electronics and Gaming Realms

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

The idea behind Samsung Electronics Co and Gaming Realms 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.