Correlation Between Samsung Electronics and Grupo Elektra

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

Diversification Opportunities for Samsung Electronics and Grupo Elektra

0.52

Correlation Coefficient

Samsung Electronics  Grupo Elektra

Very weak diversification

The 3 months correlation between Samsung and Grupo is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Grupo Elektra SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Elektra SAB 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 Grupo Elektra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Elektra SAB has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Grupo Elektra go up and down completely randomly.

Pair Corralation between Samsung Electronics and Grupo Elektra

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.07 times more return on investment than Grupo Elektra. However, Samsung Electronics Co is 13.37 times less risky than Grupo Elektra. It trades about -0.08 of its potential returns per unit of risk. Grupo Elektra SAB is currently generating about -0.12 per unit of risk. If you would invest  1,992,506  in Samsung Electronics Co on September 24, 2024 and sell it today you would lose (42,506) from holding Samsung Electronics Co or give up 2.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Samsung Electronics Co  vs.  Grupo Elektra SAB

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 weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Grupo Elektra SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Elektra SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward-looking signals remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Samsung Electronics and Grupo Elektra

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

The idea behind Samsung Electronics Co and Grupo Elektra SAB 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.