Correlation Between Samsung Electronics and National Bank
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and National Bank 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 National Bank 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 National Bank Holdings, you can compare the effects of market volatilities on Samsung Electronics and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and National Bank.
Diversification Opportunities for Samsung Electronics and National Bank
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and National is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and National Bank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank Holdings 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank Holdings has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and National Bank go up and down completely randomly.
Pair Corralation between Samsung Electronics and National Bank
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.04 times more return on investment than National Bank. However, Samsung Electronics is 1.04 times more volatile than National Bank Holdings. It trades about -0.03 of its potential returns per unit of risk. National Bank Holdings is currently generating about -0.07 per unit of risk. If you would invest 73,400 in Samsung Electronics Co on October 28, 2024 and sell it today you would lose (1,200) from holding Samsung Electronics Co or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. National Bank Holdings
Performance |
| Timeline |
| Samsung Electronics |
| National Bank Holdings |
Samsung Electronics and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and National Bank
The main advantage of trading using opposite Samsung Electronics and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
| National Bank vs. Air Lease | National Bank vs. FUYO GENERAL LEASE | National Bank vs. Wayside Technology Group | National Bank vs. Vishay Intertechnology |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |