Correlation Between Samsung Electronics and CNH Industrial
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and CNH Industrial 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 CNH Industrial 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 CNH Industrial NV, you can compare the effects of market volatilities on Samsung Electronics and CNH Industrial 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 CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and CNH Industrial.
Diversification Opportunities for Samsung Electronics and CNH Industrial
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and CNH is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and CNH Industrial NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNH Industrial NV 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 CNH Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNH Industrial NV has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and CNH Industrial go up and down completely randomly.
Pair Corralation between Samsung Electronics and CNH Industrial
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 18.42 times less return on investment than CNH Industrial. In addition to that, Samsung Electronics is 1.16 times more volatile than CNH Industrial NV. It trades about 0.01 of its total potential returns per unit of risk. CNH Industrial NV is currently generating about 0.23 per unit of volatility. If you would invest 1,054 in CNH Industrial NV on August 29, 2024 and sell it today you would earn a total of 134.00 from holding CNH Industrial NV or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. CNH Industrial NV
Performance |
| Timeline |
| Samsung Electronics |
| CNH Industrial NV |
Samsung Electronics and CNH Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and CNH Industrial
The main advantage of trading using opposite Samsung Electronics and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, CNH Industrial 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 CNH Industrial will offset losses from the drop in CNH Industrial's long position.| Samsung Electronics vs. Ondine Biomedical | Samsung Electronics vs. Europa Metals | Samsung Electronics vs. Lendinvest PLC | Samsung Electronics vs. Neometals |
| CNH Industrial vs. Lendinvest PLC | CNH Industrial vs. Neometals | CNH Industrial vs. Coor Service Management | CNH Industrial vs. Albion Technology General |
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.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |