Correlation Between Samsung Electronics and Compal Electronics

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

Diversification Opportunities for Samsung Electronics and Compal Electronics

0.0

Correlation Coefficient

Samsung Electronics  Compal Electronics

Pay attention - limited upside

The 3 months correlation between Samsung and Compal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Compal Electronics GDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compal Electronics GDR 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 Compal Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compal Electronics GDR has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Compal Electronics go up and down completely randomly.

Pair Corralation between Samsung Electronics and Compal Electronics

If you would invest  96,450  in Samsung Electronics Co on April 20, 2025 and sell it today you would earn a total of  23,850  from holding Samsung Electronics Co or generate 24.73% return on investment over 90 days.

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

Samsung Electronics Co  vs.  Compal Electronics GDR

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 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Samsung Electronics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Compal Electronics GDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Compal Electronics GDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Compal Electronics is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Samsung Electronics and Compal Electronics

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

The idea behind Samsung Electronics Co and Compal Electronics GDR 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.