Correlation Between Samsung Special and GAMEVIL

Can any of the company-specific risk be diversified away by investing in both Samsung Special and GAMEVIL 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 Special and GAMEVIL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Samsung Special Purpose and GAMEVIL, you can compare the effects of market volatilities on Samsung Special and GAMEVIL 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 Special with a short position of GAMEVIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Special and GAMEVIL.

Diversification Opportunities for Samsung Special and GAMEVIL

-0.35

Correlation Coefficient

Samsung Special  GAMEVIL

Very good diversification

The 3 months correlation between Samsung and GAMEVIL is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Special Purpose and GAMEVIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMEVIL and Samsung Special 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 Special Purpose are associated (or correlated) with GAMEVIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMEVIL has no effect on the direction of Samsung Special i.e., Samsung Special and GAMEVIL go up and down completely randomly.

Pair Corralation between Samsung Special and GAMEVIL

Assuming the 90 days trading horizon Samsung Special Purpose is expected to under-perform the GAMEVIL. In addition to that, Samsung Special is 1.04 times more volatile than GAMEVIL. It trades about -0.02 of its total potential returns per unit of risk. GAMEVIL is currently generating about 0.0 per unit of volatility. If you would invest  4,480,000  in GAMEVIL on September 14, 2024 and sell it today you would lose (660,000) from holding GAMEVIL or give up 14.73% of portfolio value over 90 days.

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

Samsung Special Purpose  vs.  GAMEVIL

Samsung Special Purpose

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samsung Special Purpose has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Samsung Special is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GAMEVIL

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GAMEVIL are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GAMEVIL sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Special and GAMEVIL

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

The idea behind Samsung Special Purpose and GAMEVIL 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.