Correlation Between Samsung Electronics and Nw Tech
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Nw Tech 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 Nw Tech 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 Nw Tech Capital, you can compare the effects of market volatilities on Samsung Electronics and Nw Tech 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 Nw Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Nw Tech.
Diversification Opportunities for Samsung Electronics and Nw Tech
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and NWTT is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Nw Tech Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nw Tech Capital 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 Nw Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nw Tech Capital has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Nw Tech go up and down completely randomly.
Pair Corralation between Samsung Electronics and Nw Tech
Assuming the 90 days horizon Samsung Electronics is expected to generate 348.87 times less return on investment than Nw Tech. But when comparing it to its historical volatility, Samsung Electronics Co is 375.32 times less risky than Nw Tech. It trades about 0.1 of its potential returns per unit of risk. Nw Tech Capital is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.05 in Nw Tech Capital on August 24, 2024 and sell it today you would lose (0.04) from holding Nw Tech Capital or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Nw Tech Capital
Performance |
| Timeline |
| Samsung Electronics |
| Nw Tech Capital |
Samsung Electronics and Nw Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Nw Tech
The main advantage of trading using opposite Samsung Electronics and Nw Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Nw Tech 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 Nw Tech will offset losses from the drop in Nw Tech's long position.| Samsung Electronics vs. Copa Holdings SA | Samsung Electronics vs. United Airlines Holdings | Samsung Electronics vs. Delta Air Lines | Samsung Electronics vs. SkyWest |
| Nw Tech vs. BCE Inc | Nw Tech vs. Axiologix | Nw Tech vs. Advanced Info Service | Nw Tech vs. Access Power Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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