Correlation Between Samsung Electronics and Naturhouse Health
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Naturhouse Health 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 Naturhouse Health 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 Naturhouse Health SA, you can compare the effects of market volatilities on Samsung Electronics and Naturhouse Health 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 Naturhouse Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Naturhouse Health.
Diversification Opportunities for Samsung Electronics and Naturhouse Health
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Naturhouse is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health 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 Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Naturhouse Health go up and down completely randomly.
Pair Corralation between Samsung Electronics and Naturhouse Health
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Naturhouse Health. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 2.48 times less risky than Naturhouse Health. The stock trades about -0.01 of its potential returns per unit of risk. The Naturhouse Health SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 147.00 in Naturhouse Health SA on August 31, 2024 and sell it today you would earn a total of 22.00 from holding Naturhouse Health SA or generate 14.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.63% |
| Values | Daily Returns |
Samsung Electronics Co vs. Naturhouse Health SA
Performance |
| Timeline |
| Samsung Electronics |
| Naturhouse Health |
Samsung Electronics and Naturhouse Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Naturhouse Health
The main advantage of trading using opposite Samsung Electronics and Naturhouse Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Naturhouse Health 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 Naturhouse Health will offset losses from the drop in Naturhouse Health's long position.| Samsung Electronics vs. The Investment | Samsung Electronics vs. Kinnevik Investment AB | Samsung Electronics vs. The Mercantile Investment | Samsung Electronics vs. Smithson Investment Trust |
| Naturhouse Health vs. Fevertree Drinks Plc | Naturhouse Health vs. Cairn Homes PLC | Naturhouse Health vs. Kinnevik Investment AB | Naturhouse Health vs. Livermore Investments Group |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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