Correlation Between Samsung Electronics and L3Harris Technologies

Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and L3Harris Technologies 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 L3Harris Technologies 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 L3Harris Technologies, you can compare the effects of market volatilities on Samsung Electronics and L3Harris Technologies 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 L3Harris Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and L3Harris Technologies.

Diversification Opportunities for Samsung Electronics and L3Harris Technologies

0.78

Correlation Coefficient

Samsung Electronics  L3Harris Technologies

Poor diversification

The 3 months correlation between Samsung and L3Harris is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and L3Harris Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L3Harris Technologies 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 L3Harris Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L3Harris Technologies has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and L3Harris Technologies go up and down completely randomly.

Pair Corralation between Samsung Electronics and L3Harris Technologies

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.53 times more return on investment than L3Harris Technologies. However, Samsung Electronics is 1.53 times more volatile than L3Harris Technologies. It trades about 0.25 of its potential returns per unit of risk. L3Harris Technologies is currently generating about 0.11 per unit of risk. If you would invest  84,000  in Samsung Electronics Co on April 1, 2025 and sell it today you would earn a total of  8,800  from holding Samsung Electronics Co or generate 10.48% return on investment over 90 days.

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

Samsung Electronics Co  vs.  L3Harris Technologies

Samsung Electronics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 10 (%) 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.

L3Harris Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in L3Harris Technologies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, L3Harris Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Electronics and L3Harris Technologies

The main advantage of trading using opposite Samsung Electronics and L3Harris Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, L3Harris Technologies 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 L3Harris Technologies will offset losses from the drop in L3Harris Technologies' long position.

The idea behind Samsung Electronics Co and L3Harris Technologies 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.