Correlation Between Daou Technology and Samsung Life
Can any of the company-specific risk be diversified away by investing in both Daou Technology 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 Daou Technology and Samsung Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daou Technology and Samsung Life Insurance, you can compare the effects of market volatilities on Daou Technology 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 Daou Technology with a short position of Samsung Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Technology and Samsung Life.
Diversification Opportunities for Daou Technology and Samsung Life
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Daou and Samsung is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Daou Technology and Samsung Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Life Insurance and Daou Technology 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 Daou Technology 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 Insurance has no effect on the direction of Daou Technology i.e., Daou Technology and Samsung Life go up and down completely randomly.
Pair Corralation between Daou Technology and Samsung Life
Assuming the 90 days trading horizon Daou Technology is expected to generate 0.5 times more return on investment than Samsung Life. However, Daou Technology is 2.0 times less risky than Samsung Life. It trades about -0.02 of its potential returns per unit of risk. Samsung Life Insurance is currently generating about -0.03 per unit of risk. If you would invest 1,882,000 in Daou Technology on October 26, 2024 and sell it today you would lose (79,000) from holding Daou Technology or give up 4.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daou Technology vs. Samsung Life Insurance
Performance |
| Timeline |
| Daou Technology |
| Samsung Life Insurance |
Daou Technology and Samsung Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Technology and Samsung Life
The main advantage of trading using opposite Daou Technology and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Technology 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.| Daou Technology vs. Dongbang Transport Logistics | Daou Technology vs. Korea Air Svc | Daou Technology vs. KakaoBank Corp | Daou Technology vs. DB Financial Investment |
| Samsung Life vs. Woori Technology | Samsung Life vs. Daou Technology | Samsung Life vs. UJU Electronics Co | Samsung Life vs. KyungIn Electronics Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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