Correlation Between Samsung Card and NAU IB

Can any of the company-specific risk be diversified away by investing in both Samsung Card and NAU IB 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 Card and NAU IB into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Samsung Card Co and NAU IB Capital, you can compare the effects of market volatilities on Samsung Card and NAU IB 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 Card with a short position of NAU IB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Card and NAU IB.

Diversification Opportunities for Samsung Card and NAU IB

-0.41

Correlation Coefficient

Samsung Card  NAU IB

Very good diversification

The 3 months correlation between Samsung and NAU is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Card Co and NAU IB Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAU IB Capital and Samsung Card 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 Card Co are associated (or correlated) with NAU IB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAU IB Capital has no effect on the direction of Samsung Card i.e., Samsung Card and NAU IB go up and down completely randomly.

Pair Corralation between Samsung Card and NAU IB

Assuming the 90 days trading horizon Samsung Card Co is expected to generate 0.42 times more return on investment than NAU IB. However, Samsung Card Co is 2.36 times less risky than NAU IB. It trades about 0.05 of its potential returns per unit of risk. NAU IB Capital is currently generating about 0.02 per unit of risk. If you would invest  2,866,265  in Samsung Card Co on October 11, 2024 and sell it today you would earn a total of  1,138,735  from holding Samsung Card Co or generate 39.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.29%
Values	Daily Returns

Samsung Card Co  vs.  NAU IB Capital

Samsung Card

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samsung Card Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Samsung Card is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

NAU IB Capital

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NAU IB Capital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, NAU IB sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Card and NAU IB

The main advantage of trading using opposite Samsung Card and NAU IB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Card position performs unexpectedly, NAU IB 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 NAU IB will offset losses from the drop in NAU IB's long position.

The idea behind Samsung Card Co and NAU IB Capital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.