Correlation Between Automobile and Samsung Life
Can any of the company-specific risk be diversified away by investing in both Automobile 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 Automobile and Samsung Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automobile Pc and Samsung Life, you can compare the effects of market volatilities on Automobile 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 Automobile with a short position of Samsung Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automobile and Samsung Life.
Diversification Opportunities for Automobile and Samsung Life
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Automobile and Samsung is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Automobile Pc and Samsung Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Life and Automobile 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 Automobile Pc 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 Automobile i.e., Automobile and Samsung Life go up and down completely randomly.
Pair Corralation between Automobile and Samsung Life
Assuming the 90 days trading horizon Automobile Pc is expected to under-perform the Samsung Life. In addition to that, Automobile is 1.41 times more volatile than Samsung Life. It trades about -0.1 of its total potential returns per unit of risk. Samsung Life is currently generating about 0.08 per unit of volatility. If you would invest 8,290,000 in Samsung Life on September 12, 2024 and sell it today you would earn a total of 1,760,000 from holding Samsung Life or generate 21.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automobile Pc vs. Samsung Life
Performance |
| Timeline |
| Automobile Pc |
| Samsung Life |
Automobile and Samsung Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automobile and Samsung Life
The main advantage of trading using opposite Automobile and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automobile 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.| Automobile vs. Daou Data Corp | Automobile vs. Solution Advanced Technology | Automobile vs. Busan Industrial Co | Automobile vs. Busan Ind |
| Samsung Life vs. Innowireless Co | Samsung Life vs. Polaris Office Corp | Samsung Life vs. Hyundai Home Shopping | Samsung Life vs. Echomarketing CoLtd |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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