Correlation Between Samsung Electronics and Getlink SE

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

Diversification Opportunities for Samsung Electronics and Getlink SE

0.61

Correlation Coefficient

Samsung Electronics  Getlink SE

Poor diversification

The 3 months correlation between Samsung and Getlink is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Getlink SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getlink SE 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 Getlink SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getlink SE has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Getlink SE go up and down completely randomly.

Pair Corralation between Samsung Electronics and Getlink SE

Assuming the 90 days horizon Samsung Electronics is expected to generate 1.14 times less return on investment than Getlink SE. In addition to that, Samsung Electronics is 1.31 times more volatile than Getlink SE. It trades about 0.03 of its total potential returns per unit of risk. Getlink SE is currently generating about 0.04 per unit of volatility. If you would invest  1,521  in Getlink SE on December 3, 2024 and sell it today you would earn a total of  45.00  from holding Getlink SE or generate 2.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Samsung Electronics Co  vs.  Getlink SE

Samsung Electronics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Samsung Electronics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Getlink SE

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Getlink SE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Getlink SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Samsung Electronics and Getlink SE

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

The idea behind Samsung Electronics Co and Getlink SE 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.