Correlation Between Samsung Electronics and NSN
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and NSN 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 NSN 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 NSN Co, you can compare the effects of market volatilities on Samsung Electronics and NSN 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 NSN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and NSN.
Diversification Opportunities for Samsung Electronics and NSN
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and NSN is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and NSN Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSN Co 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 NSN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSN Co has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and NSN go up and down completely randomly.
Pair Corralation between Samsung Electronics and NSN
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the NSN. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 5.1 times less risky than NSN. The stock trades about -0.09 of its potential returns per unit of risk. The NSN Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 121,100 in NSN Co on November 2, 2024 and sell it today you would earn a total of 6,100 from holding NSN Co or generate 5.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. NSN Co
Performance |
| Timeline |
| Samsung Electronics |
| NSN Co |
Samsung Electronics and NSN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and NSN
The main advantage of trading using opposite Samsung Electronics and NSN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, NSN 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 NSN will offset losses from the drop in NSN's long position.| Samsung Electronics vs. Seoyon Topmetal Co | Samsung Electronics vs. Formetal Co | Samsung Electronics vs. KCC Engineering Construction | Samsung Electronics vs. Woorim Machinery Co |
| NSN vs. Digital Multimedia Technology | NSN vs. ChipsMedia | NSN vs. Koryo Credit Information | NSN vs. Cube Entertainment |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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