Correlation Between Samsung Electronics and New Residential
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and New Residential 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 New Residential 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 New Residential Investment, you can compare the effects of market volatilities on Samsung Electronics and New Residential 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 New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and New Residential.
Diversification Opportunities for Samsung Electronics and New Residential
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and New is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and New Residential Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Residential Inve 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 New Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Residential Inve has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and New Residential go up and down completely randomly.
Pair Corralation between Samsung Electronics and New Residential
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the New Residential. In addition to that, Samsung Electronics is 1.08 times more volatile than New Residential Investment. It trades about -0.01 of its total potential returns per unit of risk. New Residential Investment is currently generating about 0.1 per unit of volatility. If you would invest 1,101 in New Residential Investment on October 26, 2024 and sell it today you would earn a total of 31.00 from holding New Residential Investment or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. New Residential Investment
Performance |
| Timeline |
| Samsung Electronics |
| New Residential Inve |
Samsung Electronics and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and New Residential
The main advantage of trading using opposite Samsung Electronics and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, New Residential 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 New Residential will offset losses from the drop in New Residential's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Toyota Motor Corp | Samsung Electronics vs. State Bank of | Samsung Electronics vs. SoftBank Group Corp |
| New Residential vs. Berkshire Hathaway | New Residential vs. Samsung Electronics Co | New Residential vs. Samsung Electronics Co | New Residential vs. Chocoladefabriken Lindt Spruengli |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |