Correlation Between Samsung Electronics and Induction Healthcare
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Induction 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 Induction 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 Induction Healthcare Group, you can compare the effects of market volatilities on Samsung Electronics and Induction 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 Induction Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Induction Healthcare.
Diversification Opportunities for Samsung Electronics and Induction Healthcare
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Induction is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Induction Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Induction 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 Induction Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Induction Healthcare has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Induction Healthcare go up and down completely randomly.
Pair Corralation between Samsung Electronics and Induction Healthcare
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Induction Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.06 times less risky than Induction Healthcare. The stock trades about -0.09 of its potential returns per unit of risk. The Induction Healthcare Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 850.00 in Induction Healthcare Group on September 1, 2024 and sell it today you would earn a total of 50.00 from holding Induction Healthcare Group or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Induction Healthcare Group
Performance |
| Timeline |
| Samsung Electronics |
| Induction Healthcare |
Samsung Electronics and Induction Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Induction Healthcare
The main advantage of trading using opposite Samsung Electronics and Induction Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Induction 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 Induction Healthcare will offset losses from the drop in Induction Healthcare's long position.| Samsung Electronics vs. Ecclesiastical Insurance Office | Samsung Electronics vs. FC Investment Trust | Samsung Electronics vs. New Residential Investment | Samsung Electronics vs. DFS Furniture PLC |
| Induction Healthcare vs. Samsung Electronics Co | Induction Healthcare vs. Samsung Electronics Co | Induction Healthcare vs. Hyundai Motor | Induction Healthcare vs. Toyota Motor Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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