Correlation Between Samsung Electronics and Mdica Sur

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

Diversification Opportunities for Samsung Electronics and Mdica Sur

0.38

Correlation Coefficient

Samsung Electronics  Mdica Sur

Weak diversification

The 3 months correlation between Samsung and Mdica is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Mdica Sur SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mdica Sur 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 Mdica Sur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mdica Sur SAB has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Mdica Sur go up and down completely randomly.

Pair Corralation between Samsung Electronics and Mdica Sur

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.62 times more return on investment than Mdica Sur. However, Samsung Electronics is 1.62 times more volatile than Mdica Sur SAB. It trades about 0.07 of its potential returns per unit of risk. Mdica Sur SAB is currently generating about 0.04 per unit of risk. If you would invest  1,950,000  in Samsung Electronics Co on December 24, 2024 and sell it today you would earn a total of  143,892  from holding Samsung Electronics Co or generate 7.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Samsung Electronics Co  vs.  Mdica Sur SAB

Samsung Electronics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Samsung Electronics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Mdica Sur SAB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mdica Sur SAB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Mdica Sur is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Samsung Electronics and Mdica Sur

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

The idea behind Samsung Electronics Co and Mdica Sur 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.