Correlation Between Samsung Electronics and Buyer Group

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

Diversification Opportunities for Samsung Electronics and Buyer Group

0.0

Correlation Coefficient

Samsung Electronics  Buyer Group

Pay attention - limited upside

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

Pair Corralation between Samsung Electronics and Buyer Group

Assuming the 90 days horizon Samsung Electronics is expected to generate 15.96 times less return on investment than Buyer Group. But when comparing it to its historical volatility, Samsung Electronics Co is 131.7 times less risky than Buyer Group. It trades about 0.09 of its potential returns per unit of risk. Buyer Group International is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  0.44  in Buyer Group International on October 15, 2024 and sell it today you would lose (0.30) from holding Buyer Group International or give up 68.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Samsung Electronics Co  vs.  Buyer Group International

Samsung Electronics

Risk-Adjusted Performance

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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.

Buyer Group International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Buyer Group International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unsteady basic indicators, Buyer Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Samsung Electronics and Buyer Group

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

The idea behind Samsung Electronics Co and Buyer Group International 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..