Correlation Between Samsung Electronics and Captiva Verde

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

Diversification Opportunities for Samsung Electronics and Captiva Verde

0.56

Correlation Coefficient

Samsung Electronics  Captiva Verde

Very weak diversification

The 3 months correlation between Samsung and Captiva is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Captiva Verde Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Captiva Verde Land 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 Captiva Verde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Captiva Verde Land has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Captiva Verde go up and down completely randomly.

Pair Corralation between Samsung Electronics and Captiva Verde

If you would invest  1.00  in Captiva Verde Land on December 27, 2024 and sell it today you would earn a total of  1.50  from holding Captiva Verde Land or generate 150.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Samsung Electronics Co  vs.  Captiva Verde Land

Samsung Electronics

Risk-Adjusted Performance

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.

Captiva Verde Land

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Captiva Verde Land are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Captiva Verde reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Electronics and Captiva Verde

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

The idea behind Samsung Electronics Co and Captiva Verde Land 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.