Correlation Between Samsung Electronics and INDUSTRIE
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and INDUSTRIE 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 INDUSTRIE 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 INDUSTRIE DE NORA, you can compare the effects of market volatilities on Samsung Electronics and INDUSTRIE 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 INDUSTRIE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and INDUSTRIE.
Diversification Opportunities for Samsung Electronics and INDUSTRIE
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and INDUSTRIE is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and INDUSTRIE DE NORA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDUSTRIE DE NORA 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 INDUSTRIE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDUSTRIE DE NORA has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and INDUSTRIE go up and down completely randomly.
Pair Corralation between Samsung Electronics and INDUSTRIE
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.14 times more return on investment than INDUSTRIE. However, Samsung Electronics is 1.14 times more volatile than INDUSTRIE DE NORA. It trades about -0.08 of its potential returns per unit of risk. INDUSTRIE DE NORA is currently generating about -0.15 per unit of risk. If you would invest 104,087 in Samsung Electronics Co on September 3, 2024 and sell it today you would lose (26,087) from holding Samsung Electronics Co or give up 25.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. INDUSTRIE DE NORA
Performance |
| Timeline |
| Samsung Electronics |
| INDUSTRIE DE NORA |
Samsung Electronics and INDUSTRIE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and INDUSTRIE
The main advantage of trading using opposite Samsung Electronics and INDUSTRIE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, INDUSTRIE 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 INDUSTRIE will offset losses from the drop in INDUSTRIE's long position.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Xiaomi | Samsung Electronics vs. Panasonic Corp |
| INDUSTRIE vs. Hanison Construction Holdings | INDUSTRIE vs. HEALTHCARE REAL A | INDUSTRIE vs. Natural Health Trends | INDUSTRIE vs. Hitachi Construction Machinery |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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