Correlation Between Samsung Electronics and Nel ASA
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Nel ASA 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 Nel ASA 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 Nel ASA, you can compare the effects of market volatilities on Samsung Electronics and Nel ASA 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 Nel ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Nel ASA.
Diversification Opportunities for Samsung Electronics and Nel ASA
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Nel is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Nel ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nel ASA 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 Nel ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nel ASA has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Nel ASA go up and down completely randomly.
Pair Corralation between Samsung Electronics and Nel ASA
Assuming the 90 days horizon Samsung Electronics Co is expected to generate 0.01 times more return on investment than Nel ASA. However, Samsung Electronics Co is 70.13 times less risky than Nel ASA. It trades about 0.1 of its potential returns per unit of risk. Nel ASA is currently generating about -0.05 per unit of risk. If you would invest 3,925 in Samsung Electronics Co on September 3, 2024 and sell it today you would earn a total of 135.00 from holding Samsung Electronics Co or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Nel ASA
Performance |
| Timeline |
| Samsung Electronics |
| Nel ASA |
Samsung Electronics and Nel ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Nel ASA
The main advantage of trading using opposite Samsung Electronics and Nel ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Nel ASA 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 Nel ASA will offset losses from the drop in Nel ASA's long position.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Amazon Inc | Samsung Electronics vs. Alphabet Inc Class C |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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