Correlation Between Samsung Electronics and Korean Reinsurance
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Korean Reinsurance 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 Korean Reinsurance 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 Korean Reinsurance Co, you can compare the effects of market volatilities on Samsung Electronics and Korean Reinsurance 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 Korean Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Korean Reinsurance.
Diversification Opportunities for Samsung Electronics and Korean Reinsurance
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Korean is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Korean Reinsurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Reinsurance 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 Korean Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korean Reinsurance has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Korean Reinsurance go up and down completely randomly.
Pair Corralation between Samsung Electronics and Korean Reinsurance
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Korean Reinsurance. In addition to that, Samsung Electronics is 1.39 times more volatile than Korean Reinsurance Co. It trades about -0.12 of its total potential returns per unit of risk. Korean Reinsurance Co is currently generating about 0.12 per unit of volatility. If you would invest 644,166 in Korean Reinsurance Co on September 13, 2024 and sell it today you would earn a total of 161,834 from holding Korean Reinsurance Co or generate 25.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Korean Reinsurance Co
Performance |
| Timeline |
| Samsung Electronics |
| Korean Reinsurance |
Samsung Electronics and Korean Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Korean Reinsurance
The main advantage of trading using opposite Samsung Electronics and Korean Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Korean Reinsurance 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 Korean Reinsurance will offset losses from the drop in Korean Reinsurance's long position.| Samsung Electronics vs. Korea Air Svc | Samsung Electronics vs. Display Tech Co | Samsung Electronics vs. PLAYWITH | Samsung Electronics vs. Chorokbaem Healthcare Co |
| Korean Reinsurance vs. Dgb Financial | Korean Reinsurance vs. Jeju Bank | Korean Reinsurance vs. Shinhan Financial Group | Korean Reinsurance vs. DB Financial Investment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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