Correlation Between Samsung Electronics and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Cardinal Health 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 Cardinal Health 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 Cardinal Health, you can compare the effects of market volatilities on Samsung Electronics and Cardinal Health 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 Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Cardinal Health.
Diversification Opportunities for Samsung Electronics and Cardinal Health
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Cardinal is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health 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 Cardinal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Cardinal Health go up and down completely randomly.
Pair Corralation between Samsung Electronics and Cardinal Health
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the Cardinal Health. In addition to that, Samsung Electronics is 1.38 times more volatile than Cardinal Health. It trades about -0.04 of its total potential returns per unit of risk. Cardinal Health is currently generating about 0.07 per unit of volatility. If you would invest 9,685 in Cardinal Health on August 28, 2024 and sell it today you would earn a total of 2,060 from holding Cardinal Health or generate 21.27% 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. Cardinal Health
Performance |
| Timeline |
| Samsung Electronics |
| Cardinal Health |
Samsung Electronics and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Cardinal Health
The main advantage of trading using opposite Samsung Electronics and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Cardinal Health 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 Cardinal Health will offset losses from the drop in Cardinal Health's long position.| Samsung Electronics vs. Amazon Inc | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tesla Inc | Samsung Electronics vs. Alphabet Class A |
| Cardinal Health vs. Singapore Telecommunications Limited | Cardinal Health vs. BW OFFSHORE LTD | Cardinal Health vs. Computer And Technologies | Cardinal Health vs. HEMISPHERE EGY |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |