Correlation Between Samsung Electronics and National Atomic

Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and National Atomic 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 Atomic 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 Atomic Co, you can compare the effects of market volatilities on Samsung Electronics and National Atomic 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 Atomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and National Atomic.

Diversification Opportunities for Samsung Electronics and National Atomic

0.48

Correlation Coefficient

Samsung Electronics  National Atomic

Very weak diversification

The 3 months correlation between Samsung and National is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and National Atomic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Atomic 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 Atomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Atomic has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and National Atomic go up and down completely randomly.

Pair Corralation between Samsung Electronics and National Atomic

Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the National Atomic. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.3 times less risky than National Atomic. The stock trades about -0.04 of its potential returns per unit of risk. The National Atomic Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,600  in National Atomic Co on November 28, 2024 and sell it today you would earn a total of  110.00  from holding National Atomic Co or generate 3.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Samsung Electronics Co  vs.  National Atomic Co

Samsung Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Samsung Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Samsung Electronics is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

National Atomic

Risk-Adjusted Performance

Very Weak

Over the last 90 days National Atomic Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Samsung Electronics and National Atomic

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

The idea behind Samsung Electronics Co and National Atomic Co 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.