Correlation Between Nice Information and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Nice Information 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 Nice Information and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nice Information Telecommunication and Samsung Electronics Co, you can compare the effects of market volatilities on Nice Information 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 Nice Information with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and Samsung Electronics.
Diversification Opportunities for Nice Information and Samsung Electronics
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nice and Samsung is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Nice Information 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 Nice Information Telecommunication 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 Nice Information i.e., Nice Information and Samsung Electronics go up and down completely randomly.
Pair Corralation between Nice Information and Samsung Electronics
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to generate 0.23 times more return on investment than Samsung Electronics. However, Nice Information Telecommunication is 4.34 times less risky than Samsung Electronics. It trades about -0.11 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.05 per unit of risk. If you would invest 1,872,000 in Nice Information Telecommunication on September 1, 2024 and sell it today you would lose (31,000) from holding Nice Information Telecommunication or give up 1.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nice Information Telecommunica vs. Samsung Electronics Co
Performance |
| Timeline |
| Nice Information Tel |
| Samsung Electronics |
Nice Information and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice Information and Samsung Electronics
The main advantage of trading using opposite Nice Information and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information 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.| Nice Information vs. Dongsin Engineering Construction | Nice Information vs. Doosan Fuel Cell | Nice Information vs. Daishin Balance 1 | Nice Information vs. Total Soft Bank |
| Samsung Electronics vs. Seoul Electronics Telecom | Samsung Electronics vs. Ni Steel | Samsung Electronics vs. CKH Food Health | Samsung Electronics vs. Daedong Steel Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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