Correlation Between Samsung Electronics and JPM INDIAN

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

Diversification Opportunities for Samsung Electronics and JPM INDIAN

-0.35

Correlation Coefficient

Samsung Electronics  JPM INDIAN

Very good diversification

The 3 months correlation between Samsung and JPM is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and JPM INDIAN INVT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM INDIAN INVT 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 JPM INDIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM INDIAN INVT has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and JPM INDIAN go up and down completely randomly.

Pair Corralation between Samsung Electronics and JPM INDIAN

Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the JPM INDIAN. In addition to that, Samsung Electronics is 1.81 times more volatile than JPM INDIAN INVT. It trades about -0.13 of its total potential returns per unit of risk. JPM INDIAN INVT is currently generating about 0.05 per unit of volatility. If you would invest  1,170  in JPM INDIAN INVT on September 30, 2024 and sell it today you would earn a total of  80.00  from holding JPM INDIAN INVT or generate 6.84% 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.  JPM INDIAN INVT

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. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

JPM INDIAN INVT

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JPM INDIAN INVT are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, JPM INDIAN 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 JPM INDIAN

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

The idea behind Samsung Electronics Co and JPM INDIAN INVT 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.