Correlation Between Samsung Electronics and Surge Components

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

Diversification Opportunities for Samsung Electronics and Surge Components

0.45

Correlation Coefficient

Samsung Electronics  Surge Components

Very weak diversification

The 3 months correlation between Samsung and Surge is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Surge Components in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Components 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 Surge Components. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Components has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Surge Components go up and down completely randomly.

Pair Corralation between Samsung Electronics and Surge Components

Assuming the 90 days horizon Samsung Electronics is expected to generate 13.58 times less return on investment than Surge Components. But when comparing it to its historical volatility, Samsung Electronics Co is 21.63 times less risky than Surge Components. It trades about 0.13 of its potential returns per unit of risk. Surge Components is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  220.00  in Surge Components on December 21, 2024 and sell it today you would earn a total of  16.00  from holding Surge Components or generate 7.27% return on investment over 90 days.

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

Samsung Electronics Co  vs.  Surge Components

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.

Surge Components

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Surge Components are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Surge Components may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Samsung Electronics and Surge Components

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

The idea behind Samsung Electronics Co and Surge Components 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.