Correlation Between Samsung Electronics and TP ICAP

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

Diversification Opportunities for Samsung Electronics and TP ICAP

0.82

Correlation Coefficient

Samsung Electronics  TP ICAP

Very poor diversification

The 3 months correlation between Samsung and TCAP is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and TP ICAP Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TP ICAP Group 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 TP ICAP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TP ICAP Group has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and TP ICAP go up and down completely randomly.

Pair Corralation between Samsung Electronics and TP ICAP

Assuming the 90 days trading horizon Samsung Electronics is expected to generate 1.02 times less return on investment than TP ICAP. In addition to that, Samsung Electronics is 1.34 times more volatile than TP ICAP Group. It trades about 0.2 of its total potential returns per unit of risk. TP ICAP Group is currently generating about 0.27 per unit of volatility. If you would invest  25,000  in TP ICAP Group on April 24, 2025 and sell it today you would earn a total of  5,650  from holding TP ICAP Group or generate 22.6% 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.  TP ICAP Group

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. Despite quite uncertain essential indicators, Samsung Electronics disclosed solid returns over the last few months and may actually be approaching a breakup point.

TP ICAP Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TP ICAP Group are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, TP ICAP unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Electronics and TP ICAP

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

The idea behind Samsung Electronics Co and TP ICAP Group 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.