Correlation Between Inzi Display and Samsung Electronics

Can any of the company-specific risk be diversified away by investing in both Inzi Display and Samsung Electronics 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 Inzi Display and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Inzi Display CoLtd and Samsung Electronics Co, you can compare the effects of market volatilities on Inzi Display and Samsung Electronics 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 Inzi Display with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inzi Display and Samsung Electronics.

Diversification Opportunities for Inzi Display and Samsung Electronics

-0.55

Correlation Coefficient

Inzi Display  Samsung Electronics

Excellent diversification

The 3 months correlation between Inzi and Samsung is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Inzi Display CoLtd and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Inzi Display 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 Inzi Display CoLtd are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Inzi Display i.e., Inzi Display and Samsung Electronics go up and down completely randomly.

Pair Corralation between Inzi Display and Samsung Electronics

Assuming the 90 days trading horizon Inzi Display CoLtd is expected to generate 0.66 times more return on investment than Samsung Electronics. However, Inzi Display CoLtd is 1.51 times less risky than Samsung Electronics. It trades about 0.19 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.02 per unit of risk. If you would invest  183,800  in Inzi Display CoLtd on February 22, 2024 and sell it today you would earn a total of  5,900  from holding Inzi Display CoLtd or generate 3.21% return on investment over 90 days.

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

Inzi Display CoLtd  vs.  Samsung Electronics Co

Inzi Display CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inzi Display CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Samsung Electronics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Samsung Electronics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Inzi Display and Samsung Electronics

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

The idea behind Inzi Display CoLtd and Samsung Electronics Co 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.