Correlation Between Herald Investment and Samsung Electronics

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

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

Diversification Opportunities for Herald Investment and Samsung Electronics

0.87

Correlation Coefficient

Herald Investment  Samsung Electronics

Very poor diversification

The 3 months correlation between Herald and Samsung is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Herald Investment Trust and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Herald Investment 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 Herald Investment Trust 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 Herald Investment i.e., Herald Investment and Samsung Electronics go up and down completely randomly.

Pair Corralation between Herald Investment and Samsung Electronics

Assuming the 90 days trading horizon Herald Investment Trust is expected to generate 0.49 times more return on investment than Samsung Electronics. However, Herald Investment Trust is 2.05 times less risky than Samsung Electronics. It trades about 0.4 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.2 per unit of risk. If you would invest  195,000  in Herald Investment Trust on April 24, 2025 and sell it today you would earn a total of  44,000  from holding Herald Investment Trust or generate 22.56% return on investment over 90 days.

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

Herald Investment Trust  vs.  Samsung Electronics Co

Herald Investment Trust

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Herald Investment Trust are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Herald Investment exhibited 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 15 (%) 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 Herald Investment and Samsung Electronics

The main advantage of trading using opposite Herald Investment and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herald Investment 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 Herald Investment Trust 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.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.