Correlation Between Samsung Electronics and ALPEK SAB

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

Diversification Opportunities for Samsung Electronics and ALPEK SAB

-0.87

Correlation Coefficient

Samsung Electronics  ALPEK SAB

Pay attention - limited upside

The 3 months correlation between Samsung and ALPEK is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and ALPEK SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALPEK SAB de 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 ALPEK SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALPEK SAB de has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and ALPEK SAB go up and down completely randomly.

Pair Corralation between Samsung Electronics and ALPEK SAB

Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the ALPEK SAB. In addition to that, Samsung Electronics is 1.17 times more volatile than ALPEK SAB de. It trades about -0.19 of its total potential returns per unit of risk. ALPEK SAB de is currently generating about 0.16 per unit of volatility. If you would invest  1,158  in ALPEK SAB de on September 2, 2024 and sell it today you would earn a total of  229.00  from holding ALPEK SAB de or generate 19.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Samsung Electronics Co  vs.  ALPEK SAB de

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 weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

ALPEK SAB de

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ALPEK SAB de are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ALPEK SAB sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Electronics and ALPEK SAB

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

The idea behind Samsung Electronics Co and ALPEK SAB de 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.