Correlation Between Samsung Electronics and Event Hospitality

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

Diversification Opportunities for Samsung Electronics and Event Hospitality

0.02

Correlation Coefficient

Samsung Electronics  Event Hospitality

Significant diversification

The 3 months correlation between Samsung and Event is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Event Hospitality and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Event Hospitality 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 Event Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Event Hospitality has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Event Hospitality go up and down completely randomly.

Pair Corralation between Samsung Electronics and Event Hospitality

Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Event Hospitality. In addition to that, Samsung Electronics is 1.24 times more volatile than Event Hospitality and. It trades about -0.08 of its total potential returns per unit of risk. Event Hospitality and is currently generating about 0.15 per unit of volatility. If you would invest  588.00  in Event Hospitality and on December 10, 2024 and sell it today you would earn a total of  217.00  from holding Event Hospitality and or generate 36.9% return on investment over 90 days.

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

Samsung Electronics Co  vs.  Event Hospitality and

Samsung Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Samsung Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Samsung Electronics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Event Hospitality

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Event Hospitality and are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Event Hospitality unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Electronics and Event Hospitality

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

The idea behind Samsung Electronics Co and Event Hospitality and 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.

Check out your portfolio center.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.