Correlation Between Samsung Electronics and Arlington Asset

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

Diversification Opportunities for Samsung Electronics and Arlington Asset

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Samsung and Arlington is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Arlington Asset Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arlington Asset Inve 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 Arlington Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arlington Asset Inve has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Arlington Asset go up and down completely randomly.

Pair Corralation between Samsung Electronics and Arlington Asset

If you would invest  3,979  in Samsung Electronics Co on September 11, 2024 and sell it today you would earn a total of  81.00  from holding Samsung Electronics Co or generate 2.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy0.41%
ValuesDaily Returns

Samsung Electronics Co  vs.  Arlington Asset Investment

 Performance 
       Timeline  
Samsung Electronics 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Samsung Electronics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Arlington Asset Inve 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Arlington Asset Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Arlington Asset is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Samsung Electronics and Arlington Asset Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Samsung Electronics and Arlington Asset

The main advantage of trading using opposite Samsung Electronics and Arlington Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Arlington Asset 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 Arlington Asset will offset losses from the drop in Arlington Asset's long position.
The idea behind Samsung Electronics Co and Arlington Asset Investment 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.
Check out your portfolio center.
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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