Correlation Between Samsung Electronics and Alibaba Group

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

Diversification Opportunities for Samsung Electronics and Alibaba Group

-0.44

Correlation Coefficient

Samsung Electronics  Alibaba Group

Very good diversification

The 3 months correlation between Samsung and Alibaba is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Alibaba Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Group Holding 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 Alibaba Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Group Holding has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Alibaba Group go up and down completely randomly.

Pair Corralation between Samsung Electronics and Alibaba Group

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.68 times more return on investment than Alibaba Group. However, Samsung Electronics Co is 1.48 times less risky than Alibaba Group. It trades about 0.2 of its potential returns per unit of risk. Alibaba Group Holding is currently generating about 0.02 per unit of risk. If you would invest  80,866  in Samsung Electronics Co on April 24, 2025 and sell it today you would earn a total of  17,534  from holding Samsung Electronics Co or generate 21.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Samsung Electronics Co  vs.  Alibaba Group Holding

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 uncertain basic indicators, Samsung Electronics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Alibaba Group Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alibaba Group Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Alibaba Group 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 Alibaba Group

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

The idea behind Samsung Electronics Co and Alibaba Group Holding 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.