Correlation Between Samsung Electronics and Liberty Media

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

Diversification Opportunities for Samsung Electronics and Liberty Media

0.69

Correlation Coefficient

Samsung Electronics  Liberty Media

Poor diversification

The 3 months correlation between Samsung and Liberty is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media 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 Liberty Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Media has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Liberty Media go up and down completely randomly.

Pair Corralation between Samsung Electronics and Liberty Media

Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.03 times more return on investment than Liberty Media. However, Samsung Electronics Co is 28.98 times less risky than Liberty Media. It trades about 0.11 of its potential returns per unit of risk. Liberty Media is currently generating about -0.03 per unit of risk. If you would invest  3,979  in Samsung Electronics Co on September 4, 2024 and sell it today you would earn a total of  81.00  from holding Samsung Electronics Co or generate 2.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	76.83%
Values	Daily Returns

Samsung Electronics Co  vs.  Liberty Media

Samsung Electronics

Risk-Adjusted Performance

9 of 100

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.

Liberty Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liberty Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Samsung Electronics and Liberty Media

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

The idea behind Samsung Electronics Co and Liberty Media 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.