Correlation Between Samsung Electronics and N Citron
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and N Citron 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 N Citron 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 N Citron, you can compare the effects of market volatilities on Samsung Electronics and N Citron 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 N Citron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and N Citron.
Diversification Opportunities for Samsung Electronics and N Citron
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and 101400 is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and N Citron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Citron 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 N Citron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Citron has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and N Citron go up and down completely randomly.
Pair Corralation between Samsung Electronics and N Citron
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.17 times more return on investment than N Citron. However, Samsung Electronics is 1.17 times more volatile than N Citron. It trades about 0.04 of its potential returns per unit of risk. N Citron is currently generating about -0.03 per unit of risk. If you would invest 5,300,000 in Samsung Electronics Co on September 13, 2024 and sell it today you would earn a total of 100,000 from holding Samsung Electronics Co or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. N Citron
Performance |
| Timeline |
| Samsung Electronics |
| N Citron |
Samsung Electronics and N Citron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and N Citron
The main advantage of trading using opposite Samsung Electronics and N Citron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, N Citron 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 N Citron will offset losses from the drop in N Citron's long position.| Samsung Electronics vs. Korea Air Svc | Samsung Electronics vs. Display Tech Co | Samsung Electronics vs. PLAYWITH | Samsung Electronics vs. Chorokbaem Healthcare Co |
| N Citron vs. Display Tech Co | N Citron vs. Tuksu Engineering ConstructionLtd | N Citron vs. Dongbang Ship Machinery | N Citron vs. Lotte Chilsung Beverage |
Check out your portfolio center.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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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