Correlation Between Samsung Electronics and Nable Communications
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Nable Communications 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 Nable Communications 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 Nable Communications, you can compare the effects of market volatilities on Samsung Electronics and Nable Communications 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 Nable Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Nable Communications.
Diversification Opportunities for Samsung Electronics and Nable Communications
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Nable is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Nable Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nable Communications 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 Nable Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nable Communications has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Nable Communications go up and down completely randomly.
Pair Corralation between Samsung Electronics and Nable Communications
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Nable Communications. In addition to that, Samsung Electronics is 1.37 times more volatile than Nable Communications. It trades about -0.05 of its total potential returns per unit of risk. Nable Communications is currently generating about 0.02 per unit of volatility. If you would invest 636,000 in Nable Communications on November 6, 2024 and sell it today you would earn a total of 5,000 from holding Nable Communications or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.28% |
| Values | Daily Returns |
Samsung Electronics Co vs. Nable Communications
Performance |
| Timeline |
| Samsung Electronics |
| Nable Communications |
Samsung Electronics and Nable Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Nable Communications
The main advantage of trading using opposite Samsung Electronics and Nable Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Nable Communications 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 Nable Communications will offset losses from the drop in Nable Communications' long position.| Samsung Electronics vs. Daejung Chemicals Metals | Samsung Electronics vs. Asiana Airlines | Samsung Electronics vs. Inzi Display CoLtd | Samsung Electronics vs. Shin Steel Co |
| Nable Communications vs. Kukdong Oil Chemicals | Nable Communications vs. Nasmedia Co | Nable Communications vs. Tae Kyung Chemical | Nable Communications vs. Next Entertainment World |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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