Correlation Between Samsung Electronics and AdvancedAdvT

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

Diversification Opportunities for Samsung Electronics and AdvancedAdvT

0.87

Correlation Coefficient

Samsung Electronics  AdvancedAdvT

Very poor diversification

The 3 months correlation between Samsung and AdvancedAdvT is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and AdvancedAdvT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvancedAdvT 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 AdvancedAdvT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvancedAdvT has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and AdvancedAdvT go up and down completely randomly.

Pair Corralation between Samsung Electronics and AdvancedAdvT

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.08 times more return on investment than AdvancedAdvT. However, Samsung Electronics is 1.08 times more volatile than AdvancedAdvT. It trades about 0.19 of its potential returns per unit of risk. AdvancedAdvT is currently generating about 0.19 per unit of risk. If you would invest  96,550  in Samsung Electronics Co on April 24, 2025 and sell it today you would earn a total of  24,150  from holding Samsung Electronics Co or generate 25.01% return on investment over 90 days.

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

Samsung Electronics Co  vs.  AdvancedAdvT

Samsung Electronics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Samsung Electronics unveiled solid returns over the last few months and may actually be approaching a breakup point.

AdvancedAdvT

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AdvancedAdvT are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AdvancedAdvT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Electronics and AdvancedAdvT

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

The idea behind Samsung Electronics Co and AdvancedAdvT 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.