Correlation Between Samsung Electronics and DaVita
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and DaVita 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 DaVita 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 DaVita Inc, you can compare the effects of market volatilities on Samsung Electronics and DaVita 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 DaVita. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and DaVita.
Diversification Opportunities for Samsung Electronics and DaVita
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and DaVita is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and DaVita Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DaVita Inc 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 DaVita. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DaVita Inc has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and DaVita go up and down completely randomly.
Pair Corralation between Samsung Electronics and DaVita
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the DaVita. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.12 times less risky than DaVita. The stock trades about 0.0 of its potential returns per unit of risk. The DaVita Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7,066 in DaVita Inc on September 3, 2024 and sell it today you would earn a total of 8,614 from holding DaVita Inc or generate 121.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. DaVita Inc
Performance |
| Timeline |
| Samsung Electronics |
| DaVita Inc |
Samsung Electronics and DaVita Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and DaVita
The main advantage of trading using opposite Samsung Electronics and DaVita positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, DaVita 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 DaVita will offset losses from the drop in DaVita's long position.| Samsung Electronics vs. ARISTOCRAT LEISURE | Samsung Electronics vs. Universal Display | Samsung Electronics vs. PLAYTIKA HOLDING DL 01 | Samsung Electronics vs. TRAVEL LEISURE DL 01 |
| DaVita vs. Sabra Health Care | DaVita vs. SHIP HEALTHCARE HLDGINC | DaVita vs. YOOMA WELLNESS INC | DaVita vs. INFORMATION SVC GRP |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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