Correlation Between Samsung Electronics and Goodness Growth

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

Diversification Opportunities for Samsung Electronics and Goodness Growth

0.65

Correlation Coefficient

Samsung Electronics  Goodness Growth

Poor diversification

The 3 months correlation between Samsung and Goodness is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Goodness Growth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodness Growth Holdings 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 Goodness Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodness Growth Holdings has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Goodness Growth go up and down completely randomly.

Pair Corralation between Samsung Electronics and Goodness Growth

Assuming the 90 days horizon Samsung Electronics is expected to generate 101.94 times less return on investment than Goodness Growth. But when comparing it to its historical volatility, Samsung Electronics Co is 183.85 times less risky than Goodness Growth. It trades about 0.13 of its potential returns per unit of risk. Goodness Growth Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Goodness Growth Holdings on December 4, 2024 and sell it today you would earn a total of  7.00  from holding Goodness Growth Holdings or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.65%
Values	Daily Returns

Samsung Electronics Co  vs.  Goodness Growth Holdings

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.

Goodness Growth Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goodness Growth Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Goodness Growth reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Electronics and Goodness Growth

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

The idea behind Samsung Electronics Co and Goodness Growth Holdings 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.