Correlation Between Target Healthcare and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Target Healthcare and Samsung Electronics 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 Target Healthcare and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target Healthcare REIT and Samsung Electronics Co, you can compare the effects of market volatilities on Target Healthcare and Samsung Electronics 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 Target Healthcare with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target Healthcare and Samsung Electronics.
Diversification Opportunities for Target Healthcare and Samsung Electronics
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Target and Samsung is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Target Healthcare REIT and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Target Healthcare 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 Target Healthcare REIT are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Target Healthcare i.e., Target Healthcare and Samsung Electronics go up and down completely randomly.
Pair Corralation between Target Healthcare and Samsung Electronics
Assuming the 90 days trading horizon Target Healthcare REIT is expected to generate 0.98 times more return on investment than Samsung Electronics. However, Target Healthcare REIT is 1.02 times less risky than Samsung Electronics. It trades about 0.17 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.19 per unit of risk. If you would invest 8,230 in Target Healthcare REIT on November 5, 2024 and sell it today you would earn a total of 440.00 from holding Target Healthcare REIT or generate 5.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Target Healthcare REIT vs. Samsung Electronics Co
Performance |
| Timeline |
| Target Healthcare REIT |
| Samsung Electronics |
Target Healthcare and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target Healthcare and Samsung Electronics
The main advantage of trading using opposite Target Healthcare and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target Healthcare position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Target Healthcare vs. Made Tech Group | Target Healthcare vs. Pressure Technologies Plc | Target Healthcare vs. Griffin Mining | Target Healthcare vs. Sartorius Stedim Biotech |
| Samsung Electronics vs. Porvair plc | Samsung Electronics vs. Norwegian Air Shuttle | Samsung Electronics vs. InterContinental Hotels Group | Samsung Electronics vs. Dalata Hotel Group |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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