Correlation Between Samsung Electronics and Lotte Non
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Lotte Non 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 Lotte Non 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 Lotte Non Life, you can compare the effects of market volatilities on Samsung Electronics and Lotte Non 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 Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Lotte Non.
Diversification Opportunities for Samsung Electronics and Lotte Non
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Samsung and Lotte is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Lotte Non Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Non Life 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 Lotte Non. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Non Life has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Lotte Non go up and down completely randomly.
Pair Corralation between Samsung Electronics and Lotte Non
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.98 times more return on investment than Lotte Non. However, Samsung Electronics Co is 1.02 times less risky than Lotte Non. It trades about -0.16 of its potential returns per unit of risk. Lotte Non Life is currently generating about -0.2 per unit of risk. If you would invest 7,358,711 in Samsung Electronics Co on August 29, 2024 and sell it today you would lose (1,528,711) from holding Samsung Electronics Co or give up 20.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Lotte Non Life
Performance |
| Timeline |
| Samsung Electronics |
| Lotte Non Life |
Samsung Electronics and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Lotte Non
The main advantage of trading using opposite Samsung Electronics and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Lotte Non 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 Lotte Non will offset losses from the drop in Lotte Non's long position.| Samsung Electronics vs. Chin Yang Chemical | Samsung Electronics vs. Dongbang Transport Logistics | Samsung Electronics vs. Shinhan Inverse Silver | Samsung Electronics vs. JC Chemical Co |
| Lotte Non vs. Daou Data Corp | Lotte Non vs. Alton Sports CoLtd | Lotte Non vs. Display Tech Co | Lotte Non vs. Sangsin Energy Display |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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