Correlation Between Samsung Electronics and Guaranty Trust

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

Diversification Opportunities for Samsung Electronics and Guaranty Trust

0.7

Correlation Coefficient

Samsung Electronics  Guaranty Trust

Poor diversification

The 3 months correlation between Samsung and Guaranty is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Guaranty Trust Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guaranty Trust 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 Guaranty Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guaranty Trust Holding has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Guaranty Trust go up and down completely randomly.

Pair Corralation between Samsung Electronics and Guaranty Trust

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.3 times more return on investment than Guaranty Trust. However, Samsung Electronics Co is 3.36 times less risky than Guaranty Trust. It trades about 0.21 of its potential returns per unit of risk. Guaranty Trust Holding is currently generating about 0.06 per unit of risk. If you would invest  79,873  in Samsung Electronics Co on April 20, 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 Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Samsung Electronics Co  vs.  Guaranty Trust Holding

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. 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.

Guaranty Trust Holding

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guaranty Trust Holding are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain essential indicators, Guaranty Trust disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Electronics and Guaranty Trust

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

The idea behind Samsung Electronics Co and Guaranty Trust 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.