Correlation Between Samsung Electronics and Norfolk Southern
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Norfolk Southern 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 Norfolk Southern 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 Norfolk Southern, you can compare the effects of market volatilities on Samsung Electronics and Norfolk Southern 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 Norfolk Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Norfolk Southern.
Diversification Opportunities for Samsung Electronics and Norfolk Southern
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Norfolk is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Norfolk Southern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norfolk Southern 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 Norfolk Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norfolk Southern has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Norfolk Southern go up and down completely randomly.
Pair Corralation between Samsung Electronics and Norfolk Southern
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Norfolk Southern. In addition to that, Samsung Electronics is 1.26 times more volatile than Norfolk Southern. It trades about -0.07 of its total potential returns per unit of risk. Norfolk Southern is currently generating about 0.07 per unit of volatility. If you would invest 21,546 in Norfolk Southern on September 3, 2024 and sell it today you would earn a total of 4,454 from holding Norfolk Southern or generate 20.67% 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. Norfolk Southern
Performance |
| Timeline |
| Samsung Electronics |
| Norfolk Southern |
Samsung Electronics and Norfolk Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Norfolk Southern
The main advantage of trading using opposite Samsung Electronics and Norfolk Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Norfolk Southern 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 Norfolk Southern will offset losses from the drop in Norfolk Southern's long position.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Sony Group | Samsung Electronics vs. Xiaomi |
| Norfolk Southern vs. Superior Plus Corp | Norfolk Southern vs. NMI Holdings | Norfolk Southern vs. Origin Agritech | Norfolk Southern vs. SIVERS SEMICONDUCTORS AB |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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