Correlation Between Samsung Electronics and Genuit Group

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

Diversification Opportunities for Samsung Electronics and Genuit Group

0.71

Correlation Coefficient

Samsung Electronics  Genuit Group

Poor diversification

The 3 months correlation between Samsung and Genuit is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Genuit Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genuit Group plc 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 Genuit Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genuit Group plc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Genuit Group go up and down completely randomly.

Pair Corralation between Samsung Electronics and Genuit Group

Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Genuit Group. In addition to that, Samsung Electronics is 1.31 times more volatile than Genuit Group plc. It trades about -0.13 of its total potential returns per unit of risk. Genuit Group plc is currently generating about -0.17 per unit of volatility. If you would invest  48,850  in Genuit Group plc on September 14, 2024 and sell it today you would lose (8,700) from holding Genuit Group plc or give up 17.81% of portfolio value over 90 days.

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

Samsung Electronics Co  vs.  Genuit Group plc

Samsung Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samsung Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Genuit Group plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genuit Group plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Samsung Electronics and Genuit Group

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

The idea behind Samsung Electronics Co and Genuit Group plc 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.