Correlation Between Samsung Electronics and National Health
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and National 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 National 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 National Health Investors, you can compare the effects of market volatilities on Samsung Electronics and National 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 National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and National Health.
Diversification Opportunities for Samsung Electronics and National Health
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samsung and National is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors 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 Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and National Health go up and down completely randomly.
Pair Corralation between Samsung Electronics and National Health
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.24 times more return on investment than National Health. However, Samsung Electronics is 1.24 times more volatile than National Health Investors. It trades about 0.06 of its potential returns per unit of risk. National Health Investors is currently generating about -0.02 per unit of risk. If you would invest 74,800 in Samsung Electronics Co on October 19, 2024 and sell it today you would earn a total of 1,400 from holding Samsung Electronics Co or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Samsung Electronics Co vs. National Health Investors
Performance |
| Timeline |
| Samsung Electronics |
| National Health Investors |
Samsung Electronics and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and National Health
The main advantage of trading using opposite Samsung Electronics and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, National 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 National Health will offset losses from the drop in National Health's long position.| Samsung Electronics vs. Samsung Electronics Co | Samsung Electronics vs. Microsoft | Samsung Electronics vs. Tencent Holdings |
| National Health vs. Liberty Broadband | National Health vs. GOLD ROAD RES | National Health vs. EVS Broadcast Equipment | National Health vs. Samsung Electronics Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |