Correlation Between Samsung Electronics and Samsung Life
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Samsung Life 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 Samsung Life 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 Samsung Life, you can compare the effects of market volatilities on Samsung Electronics and Samsung Life 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 Samsung Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Samsung Life.
Diversification Opportunities for Samsung Electronics and Samsung Life
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samsung and Samsung is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Samsung Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung 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 Samsung Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Life has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Samsung Life go up and down completely randomly.
Pair Corralation between Samsung Electronics and Samsung Life
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.89 times more return on investment than Samsung Life. However, Samsung Electronics Co is 1.12 times less risky than Samsung Life. It trades about 0.0 of its potential returns per unit of risk. Samsung Life is currently generating about -0.55 per unit of risk. If you would invest 5,440,000 in Samsung Electronics Co on October 25, 2024 and sell it today you would lose (10,000) from holding Samsung Electronics Co or give up 0.18% 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. Samsung Life
Performance |
| Timeline |
| Samsung Electronics |
| Samsung Life |
Samsung Electronics and Samsung Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Samsung Life
The main advantage of trading using opposite Samsung Electronics and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Samsung Life 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 Life will offset losses from the drop in Samsung Life's long position.| Samsung Electronics vs. Kbi Metal Co | Samsung Electronics vs. Jahwa Electronics Co | Samsung Electronics vs. Heungkuk Metaltech CoLtd | Samsung Electronics vs. Shinhan Inverse Copper |
| Samsung Life vs. Nable Communications | Samsung Life vs. INNOX Advanced Materials | Samsung Life vs. Hyosung Advanced Materials | Samsung Life vs. LS Materials |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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