Correlation Between Samsung Electronics and Katahdin Bankshares

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

Diversification Opportunities for Samsung Electronics and Katahdin Bankshares

0.68

Correlation Coefficient

Samsung Electronics  Katahdin Bankshares

Poor diversification

The 3 months correlation between Samsung and Katahdin is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Katahdin Bankshares Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katahdin Bankshares Corp 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 Katahdin Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Katahdin Bankshares Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Katahdin Bankshares go up and down completely randomly.

Pair Corralation between Samsung Electronics and Katahdin Bankshares

If you would invest  2,430  in Katahdin Bankshares Corp on September 5, 2024 and sell it today you would earn a total of  25.00  from holding Katahdin Bankshares Corp or generate 1.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Samsung Electronics Co  vs.  Katahdin Bankshares Corp

Samsung Electronics

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Samsung Electronics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Katahdin Bankshares Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Katahdin Bankshares Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Katahdin Bankshares may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Samsung Electronics and Katahdin Bankshares

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

The idea behind Samsung Electronics Co and Katahdin Bankshares Corp 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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.