Correlation Between Samsung Electronics and ANTA SPORTS

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

Diversification Opportunities for Samsung Electronics and ANTA SPORTS

0.23

Correlation Coefficient

Samsung Electronics  ANTA SPORTS

Modest diversification

The 3 months correlation between Samsung and ANTA is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and ANTA SPORTS PRODUCT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA SPORTS PRODUCT 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 ANTA SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA SPORTS PRODUCT has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and ANTA SPORTS go up and down completely randomly.

Pair Corralation between Samsung Electronics and ANTA SPORTS

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.04 times more return on investment than ANTA SPORTS. However, Samsung Electronics is 1.04 times more volatile than ANTA SPORTS PRODUCT. It trades about -0.05 of its potential returns per unit of risk. ANTA SPORTS PRODUCT is currently generating about -0.08 per unit of risk. If you would invest  80,800  in Samsung Electronics Co on October 6, 2024 and sell it today you would lose (5,400) from holding Samsung Electronics Co or give up 6.68% of portfolio value over 90 days.

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

Samsung Electronics Co  vs.  ANTA SPORTS PRODUCT

Samsung Electronics

Risk-Adjusted Performance

0 of 100

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 conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ANTA SPORTS PRODUCT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANTA SPORTS PRODUCT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Samsung Electronics and ANTA SPORTS

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

The idea behind Samsung Electronics Co and ANTA SPORTS PRODUCT 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.