Correlation Between Capital Metals and Samsung Electronics

Can any of the company-specific risk be diversified away by investing in both Capital Metals and Samsung 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 Capital Metals and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Capital Metals PLC and Samsung Electronics Co, you can compare the effects of market volatilities on Capital Metals and Samsung 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 Capital Metals with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Metals and Samsung Electronics.

Diversification Opportunities for Capital Metals and Samsung Electronics

0.46

Correlation Coefficient

Capital Metals  Samsung Electronics

Very weak diversification

The 3 months correlation between Capital and Samsung is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Capital Metals PLC and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Capital Metals 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 Capital Metals PLC are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Capital Metals i.e., Capital Metals and Samsung Electronics go up and down completely randomly.

Pair Corralation between Capital Metals and Samsung Electronics

Assuming the 90 days trading horizon Capital Metals is expected to generate 1.27 times less return on investment than Samsung Electronics. In addition to that, Capital Metals is 2.48 times more volatile than Samsung Electronics Co. It trades about 0.07 of its total potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.21 per unit of volatility. If you would invest  79,873  in Samsung Electronics Co on April 22, 2025 and sell it today you would earn a total of  18,127  from holding Samsung Electronics Co or generate 22.69% return on investment over 90 days.

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

Capital Metals PLC  vs.  Samsung Electronics Co

Capital Metals PLC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Metals PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Capital Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Samsung Electronics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 16 (%) 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.

Pair Trading with Capital Metals and Samsung Electronics

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

The idea behind Capital Metals PLC and Samsung Electronics Co 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.