Correlation Between Samsung Electronics and YARA INTL

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

Diversification Opportunities for Samsung Electronics and YARA INTL

0.08

Correlation Coefficient

Samsung Electronics  YARA INTL

Significant diversification

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

Pair Corralation between Samsung Electronics and YARA INTL

Assuming the 90 days horizon Samsung Electronics is expected to generate 2.19 times less return on investment than YARA INTL. In addition to that, Samsung Electronics is 1.24 times more volatile than YARA INTL ASA. It trades about 0.05 of its total potential returns per unit of risk. YARA INTL ASA is currently generating about 0.15 per unit of volatility. If you would invest  1,240  in YARA INTL ASA on December 26, 2024 and sell it today you would earn a total of  200.00  from holding YARA INTL ASA or generate 16.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Samsung Electronics Co  vs.  YARA INTL ASA

Samsung Electronics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Samsung Electronics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

YARA INTL ASA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in YARA INTL ASA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, YARA INTL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Electronics and YARA INTL

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

The idea behind Samsung Electronics Co and YARA INTL ASA 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.