Correlation Between Samsung Electronics and Tracsis Plc

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

Diversification Opportunities for Samsung Electronics and Tracsis Plc

-0.16

Correlation Coefficient

Samsung Electronics  Tracsis Plc

Good diversification

The 3 months correlation between Samsung and Tracsis is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Tracsis Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tracsis 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 Tracsis Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tracsis Plc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Tracsis Plc go up and down completely randomly.

Pair Corralation between Samsung Electronics and Tracsis Plc

Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Tracsis Plc. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.51 times less risky than Tracsis Plc. The stock trades about -0.18 of its potential returns per unit of risk. The Tracsis Plc is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  61,500  in Tracsis Plc on September 23, 2024 and sell it today you would lose (9,500) from holding Tracsis Plc or give up 15.45% of portfolio value over 90 days.

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

Samsung Electronics Co  vs.  Tracsis 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.

Tracsis Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tracsis Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Samsung Electronics and Tracsis Plc

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

The idea behind Samsung Electronics Co and Tracsis 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.