Correlation Between Samsung Electronics and Victrex Plc

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

Diversification Opportunities for Samsung Electronics and Victrex Plc

-0.63

Correlation Coefficient

Samsung Electronics  Victrex Plc

Excellent diversification

The 3 months correlation between Samsung and Victrex is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Victrex plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victrex plc 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 Victrex Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victrex plc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Victrex Plc go up and down completely randomly.

Pair Corralation between Samsung Electronics and Victrex Plc

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.74 times more return on investment than Victrex Plc. However, Samsung Electronics Co is 1.36 times less risky than Victrex Plc. It trades about 0.21 of its potential returns per unit of risk. Victrex plc is currently generating about -0.08 per unit of risk. 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Samsung Electronics Co  vs.  Victrex plc

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

Victrex plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victrex plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Samsung Electronics and Victrex Plc

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

The idea behind Samsung Electronics Co and Victrex plc 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.