Correlation Between Samsung Electronics and Nemak S
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Nemak S 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 Nemak S 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 Nemak S A, you can compare the effects of market volatilities on Samsung Electronics and Nemak S 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 Nemak S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Nemak S.
Diversification Opportunities for Samsung Electronics and Nemak S
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Nemak is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Nemak S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nemak S A 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 Nemak S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nemak S A has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Nemak S go up and down completely randomly.
Pair Corralation between Samsung Electronics and Nemak S
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.83 times more return on investment than Nemak S. However, Samsung Electronics Co is 1.21 times less risky than Nemak S. It trades about 0.0 of its potential returns per unit of risk. Nemak S A is currently generating about -0.08 per unit of risk. If you would invest 2,116,443 in Samsung Electronics Co on August 30, 2024 and sell it today you would lose (123,937) from holding Samsung Electronics Co or give up 5.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Samsung Electronics Co vs. Nemak S A
Performance |
| Timeline |
| Samsung Electronics |
| Nemak S A |
Samsung Electronics and Nemak S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Nemak S
The main advantage of trading using opposite Samsung Electronics and Nemak S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Nemak S 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 Nemak S will offset losses from the drop in Nemak S's long position.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. MercadoLibre | Samsung Electronics vs. The Walt Disney | Samsung Electronics vs. Southwest Airlines |
| Nemak S vs. Samsung Electronics Co | Nemak S vs. Berkshire Hathaway | Nemak S vs. Banco Actinver SA | Nemak S vs. Baidu Inc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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