Correlation Between Samsung Electronics and Intuit

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

Diversification Opportunities for Samsung Electronics and Intuit

-0.81

Correlation Coefficient

Samsung Electronics  Intuit

Pay attention - limited upside

The 3 months correlation between Samsung and Intuit is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Intuit Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuit Inc 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 Intuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuit Inc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Intuit go up and down completely randomly.

Pair Corralation between Samsung Electronics and Intuit

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.03 times more return on investment than Intuit. However, Samsung Electronics Co is 33.9 times less risky than Intuit. It trades about 0.23 of its potential returns per unit of risk. Intuit Inc is currently generating about -0.12 per unit of risk. If you would invest  1,945,750  in Samsung Electronics Co on October 13, 2024 and sell it today you would earn a total of  4,250  from holding Samsung Electronics Co or generate 0.22% return on investment over 90 days.

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

Samsung Electronics Co  vs.  Intuit Inc

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 February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Intuit Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intuit Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Intuit may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Samsung Electronics and Intuit

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

The idea behind Samsung Electronics Co and Intuit Inc 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.