Correlation Between Samsung Electronics and EMPLOYERS HLDGS

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

Diversification Opportunities for Samsung Electronics and EMPLOYERS HLDGS

-0.03

Correlation Coefficient

Samsung Electronics  EMPLOYERS HLDGS

Good diversification

The 3 months correlation between Samsung and EMPLOYERS is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and EMPLOYERS HLDGS DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMPLOYERS HLDGS DL 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 EMPLOYERS HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMPLOYERS HLDGS DL has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and EMPLOYERS HLDGS go up and down completely randomly.

Pair Corralation between Samsung Electronics and EMPLOYERS HLDGS

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.26 times more return on investment than EMPLOYERS HLDGS. However, Samsung Electronics is 1.26 times more volatile than EMPLOYERS HLDGS DL. It trades about 0.09 of its potential returns per unit of risk. EMPLOYERS HLDGS DL is currently generating about -0.03 per unit of risk. If you would invest  86,200  in Samsung Electronics Co on December 30, 2024 and sell it today you would earn a total of  8,200  from holding Samsung Electronics Co or generate 9.51% return on investment over 90 days.

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

Samsung Electronics Co  vs.  EMPLOYERS HLDGS DL

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 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Samsung Electronics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

EMPLOYERS HLDGS DL

Risk-Adjusted Performance

Very Weak

Over the last 90 days EMPLOYERS HLDGS DL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, EMPLOYERS HLDGS 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 EMPLOYERS HLDGS

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

The idea behind Samsung Electronics Co and EMPLOYERS HLDGS DL 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.