Correlation Between Samsung Electronics and Aena SME

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

Diversification Opportunities for Samsung Electronics and Aena SME

-0.75

Correlation Coefficient

Samsung Electronics  Aena SME

Pay attention - limited upside

The 3 months correlation between Samsung and Aena is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Aena SME SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SME SA 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 Aena SME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aena SME SA has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Aena SME go up and down completely randomly.

Pair Corralation between Samsung Electronics and Aena SME

Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Aena SME. In addition to that, Samsung Electronics is 1.52 times more volatile than Aena SME SA. It trades about 0.0 of its total potential returns per unit of risk. Aena SME SA is currently generating about 0.1 per unit of volatility. If you would invest  11,630  in Aena SME SA on September 3, 2024 and sell it today you would earn a total of  8,810  from holding Aena SME SA or generate 75.75% return on investment over 90 days.

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

Samsung Electronics Co  vs.  Aena SME SA

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 unsteady 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.

Aena SME SA

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aena SME SA are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aena SME may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Samsung Electronics and Aena SME

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

The idea behind Samsung Electronics Co and Aena SME SA 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.