Correlation Between Samsung Electronics and Evertz Technologies

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

Diversification Opportunities for Samsung Electronics and Evertz Technologies

-0.08

Correlation Coefficient

Samsung Electronics  Evertz Technologies

Good diversification

The 3 months correlation between Samsung and Evertz is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Evertz Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evertz Technologies 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 Evertz Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evertz Technologies has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Evertz Technologies go up and down completely randomly.

Pair Corralation between Samsung Electronics and Evertz Technologies

Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.04 times more return on investment than Evertz Technologies. However, Samsung Electronics Co is 25.87 times less risky than Evertz Technologies. It trades about 0.12 of its potential returns per unit of risk. Evertz Technologies Limited is currently generating about -0.07 per unit of risk. If you would invest  4,035  in Samsung Electronics Co on December 23, 2024 and sell it today you would earn a total of  25.00  from holding Samsung Electronics Co or generate 0.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Samsung Electronics Co  vs.  Evertz Technologies Limited

Samsung Electronics

Risk-Adjusted Performance

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Evertz Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evertz Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Samsung Electronics and Evertz Technologies

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

The idea behind Samsung Electronics Co and Evertz Technologies Limited 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.