Correlation Between Nature and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Nature 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 Nature and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nature and Environment and Samsung Electronics Co, you can compare the effects of market volatilities on Nature 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 Nature with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nature and Samsung Electronics.
Diversification Opportunities for Nature and Samsung Electronics
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nature and Samsung is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Nature and Environment and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Nature 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 Nature and Environment 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 Nature i.e., Nature and Samsung Electronics go up and down completely randomly.
Pair Corralation between Nature and Samsung Electronics
Assuming the 90 days trading horizon Nature and Environment is expected to generate 0.66 times more return on investment than Samsung Electronics. However, Nature and Environment is 1.52 times less risky than Samsung Electronics. It trades about -0.2 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.16 per unit of risk. If you would invest 61,400 in Nature and Environment on November 7, 2024 and sell it today you would lose (2,700) from holding Nature and Environment or give up 4.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nature and Environment vs. Samsung Electronics Co
Performance |
| Timeline |
| Nature and Environment |
| Samsung Electronics |
Nature and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nature and Samsung Electronics
The main advantage of trading using opposite Nature and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nature 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.| Nature vs. FNC Entertainment Co | Nature vs. Barunson Entertainment Arts | Nature vs. LAKE MATERIALS LTD | Nature vs. JYP Entertainment Corp |
| Samsung Electronics vs. SK Chemicals Co | Samsung Electronics vs. LAKE MATERIALS LTD | Samsung Electronics vs. TK Chemical | Samsung Electronics vs. SAMG Entertainment 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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