Correlation Between Samsung Electronics and Inspiration Healthcare
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Inspiration Healthcare 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 Inspiration Healthcare 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 Inspiration Healthcare Group, you can compare the effects of market volatilities on Samsung Electronics and Inspiration Healthcare 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 Inspiration Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Inspiration Healthcare.
Diversification Opportunities for Samsung Electronics and Inspiration Healthcare
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Samsung and Inspiration is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Inspiration Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspiration Healthcare 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 Inspiration Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspiration Healthcare has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Inspiration Healthcare go up and down completely randomly.
Pair Corralation between Samsung Electronics and Inspiration Healthcare
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.42 times more return on investment than Inspiration Healthcare. However, Samsung Electronics is 1.42 times more volatile than Inspiration Healthcare Group. It trades about 0.01 of its potential returns per unit of risk. Inspiration Healthcare Group is currently generating about -0.14 per unit of risk. If you would invest 88,300 in Samsung Electronics Co on August 29, 2024 and sell it today you would lose (100.00) from holding Samsung Electronics Co or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Inspiration Healthcare Group
Performance |
| Timeline |
| Samsung Electronics |
| Inspiration Healthcare |
Samsung Electronics and Inspiration Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Inspiration Healthcare
The main advantage of trading using opposite Samsung Electronics and Inspiration Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Inspiration Healthcare 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 Inspiration Healthcare will offset losses from the drop in Inspiration Healthcare's long position.| Samsung Electronics vs. Toyota Motor Corp | Samsung Electronics vs. SoftBank Group Corp | Samsung Electronics vs. OTP Bank Nyrt | Samsung Electronics vs. Las Vegas Sands |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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