Correlation Between Samsung Electronics and LANDSEA HOMES

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

Diversification Opportunities for Samsung Electronics and LANDSEA HOMES

0.77

Correlation Coefficient

Samsung Electronics  LANDSEA HOMES

Poor diversification

The 3 months correlation between Samsung and LANDSEA is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and LANDSEA HOMES P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANDSEA HOMES P 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 LANDSEA HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANDSEA HOMES P has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and LANDSEA HOMES go up and down completely randomly.

Pair Corralation between Samsung Electronics and LANDSEA HOMES

Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the LANDSEA HOMES. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 2.25 times less risky than LANDSEA HOMES. The stock trades about -0.01 of its potential returns per unit of risk. The LANDSEA HOMES P is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  875.00  in LANDSEA HOMES P on April 20, 2025 and sell it today you would earn a total of  90.00  from holding LANDSEA HOMES P or generate 10.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.2%
Values	Daily Returns

Samsung Electronics Co  vs.  LANDSEA HOMES P

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

LANDSEA HOMES P

Risk-Adjusted Performance

Good

Over the last 90 days LANDSEA HOMES P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unsteady basic indicators, LANDSEA HOMES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Electronics and LANDSEA HOMES

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

The idea behind Samsung Electronics Co and LANDSEA HOMES P 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.