Correlation Between Samsung Electronics and Brightrock Gold

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

Diversification Opportunities for Samsung Electronics and Brightrock Gold

0.0

Correlation Coefficient

Samsung Electronics  Brightrock Gold

Pay attention - limited upside

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

Pair Corralation between Samsung Electronics and Brightrock Gold

Assuming the 90 days horizon Samsung Electronics is expected to generate 17.54 times less return on investment than Brightrock Gold. But when comparing it to its historical volatility, Samsung Electronics Co is 131.44 times less risky than Brightrock Gold. It trades about 0.09 of its potential returns per unit of risk. Brightrock Gold Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  26.00  in Brightrock Gold Corp on October 15, 2024 and sell it today you would lose (16.60) from holding Brightrock Gold Corp or give up 63.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Samsung Electronics Co  vs.  Brightrock Gold Corp

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. Despite nearly stable essential indicators, Samsung Electronics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Brightrock Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brightrock Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Brightrock Gold is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Samsung Electronics and Brightrock Gold

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

The idea behind Samsung Electronics Co and Brightrock Gold Corp 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.