Correlation Between Samsung Electronics and Investec PLC

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

Diversification Opportunities for Samsung Electronics and Investec PLC

0.0

Correlation Coefficient

Samsung Electronics  Investec PLC

Pay attention - limited upside

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

Pair Corralation between Samsung Electronics and Investec PLC

If you would invest  91,600  in Samsung Electronics Co on December 27, 2024 and sell it today you would earn a total of  11,600  from holding Samsung Electronics Co or generate 12.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Samsung Electronics Co  vs.  Investec PLC

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 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Samsung Electronics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Investec PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Investec PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Investec PLC is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Samsung Electronics and Investec PLC

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

The idea behind Samsung Electronics Co and Investec 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.