Correlation Between Samsung Electronics and Sdiptech

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

Diversification Opportunities for Samsung Electronics and Sdiptech

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Samsung and Sdiptech is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sdiptech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sdiptech AB 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 Sdiptech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sdiptech AB has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sdiptech go up and down completely randomly.

Pair Corralation between Samsung Electronics and Sdiptech

Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Sdiptech. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 2.13 times less risky than Sdiptech. The stock trades about -0.03 of its potential returns per unit of risk. The Sdiptech AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  23,642  in Sdiptech AB on October 29, 2024 and sell it today you would earn a total of  13,358  from holding Sdiptech AB or generate 56.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Samsung Electronics Co  vs.  Sdiptech AB

 Performance 
       Timeline  
Samsung Electronics 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Sdiptech AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sdiptech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Samsung Electronics and Sdiptech Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Samsung Electronics and Sdiptech

The main advantage of trading using opposite Samsung Electronics and Sdiptech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Sdiptech 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 Sdiptech will offset losses from the drop in Sdiptech's long position.
The idea behind Samsung Electronics Co and Sdiptech AB 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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