Correlation Between Samsung Electronics and NightFood Holdings
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and NightFood Holdings 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 NightFood Holdings 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 NightFood Holdings, you can compare the effects of market volatilities on Samsung Electronics and NightFood Holdings 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 NightFood Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and NightFood Holdings.
Diversification Opportunities for Samsung Electronics and NightFood Holdings
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and NightFood is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and NightFood Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NightFood Holdings 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 NightFood Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NightFood Holdings has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and NightFood Holdings go up and down completely randomly.
Pair Corralation between Samsung Electronics and NightFood Holdings
Assuming the 90 days horizon Samsung Electronics is expected to generate 92.33 times less return on investment than NightFood Holdings. But when comparing it to its historical volatility, Samsung Electronics Co is 187.53 times less risky than NightFood Holdings. It trades about 0.11 of its potential returns per unit of risk. NightFood Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.79 in NightFood Holdings on September 2, 2024 and sell it today you would lose (0.63) from holding NightFood Holdings or give up 35.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. NightFood Holdings
Performance |
| Timeline |
| Samsung Electronics |
| NightFood Holdings |
Samsung Electronics and NightFood Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and NightFood Holdings
The main advantage of trading using opposite Samsung Electronics and NightFood Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, NightFood Holdings 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 NightFood Holdings will offset losses from the drop in NightFood Holdings' long position.| Samsung Electronics vs. Legacy Education | Samsung Electronics vs. Apple Inc | Samsung Electronics vs. NVIDIA | Samsung Electronics vs. Microsoft |
| NightFood Holdings vs. The A2 Milk | NightFood Holdings vs. Artisan Consumer Goods | NightFood Holdings vs. General Mills |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |