Correlation Between Samsung Electronics and NAGOYA RAILROAD
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and NAGOYA RAILROAD 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 NAGOYA RAILROAD 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 NAGOYA RAILROAD, you can compare the effects of market volatilities on Samsung Electronics and NAGOYA RAILROAD 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 NAGOYA RAILROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and NAGOYA RAILROAD.
Diversification Opportunities for Samsung Electronics and NAGOYA RAILROAD
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and NAGOYA is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and NAGOYA RAILROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAGOYA RAILROAD 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 NAGOYA RAILROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAGOYA RAILROAD has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and NAGOYA RAILROAD go up and down completely randomly.
Pair Corralation between Samsung Electronics and NAGOYA RAILROAD
Assuming the 90 days horizon Samsung Electronics Co is expected to generate 1.36 times more return on investment than NAGOYA RAILROAD. However, Samsung Electronics is 1.36 times more volatile than NAGOYA RAILROAD. It trades about 0.2 of its potential returns per unit of risk. NAGOYA RAILROAD is currently generating about 0.04 per unit of risk. If you would invest 88,800 in Samsung Electronics Co on October 10, 2024 and sell it today you would earn a total of 6,200 from holding Samsung Electronics Co or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. NAGOYA RAILROAD
Performance |
| Timeline |
| Samsung Electronics |
| NAGOYA RAILROAD |
Samsung Electronics and NAGOYA RAILROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and NAGOYA RAILROAD
The main advantage of trading using opposite Samsung Electronics and NAGOYA RAILROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, NAGOYA RAILROAD 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 NAGOYA RAILROAD will offset losses from the drop in NAGOYA RAILROAD's long position.| Samsung Electronics vs. Delta Electronics Public | Samsung Electronics vs. Richardson Electronics | Samsung Electronics vs. STORE ELECTRONIC | Samsung Electronics vs. SPECTRAL MEDICAL |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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