Correlation Between Samsung Card and Industrial Bank
Can any of the company-specific risk be diversified away by investing in both Samsung Card and Industrial Bank 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 Card and Industrial Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Card Co and Industrial Bank, you can compare the effects of market volatilities on Samsung Card and Industrial Bank 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 Card with a short position of Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Card and Industrial Bank.
Diversification Opportunities for Samsung Card and Industrial Bank
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Industrial is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Card Co and Industrial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank and Samsung Card 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 Card Co are associated (or correlated) with Industrial Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Bank has no effect on the direction of Samsung Card i.e., Samsung Card and Industrial Bank go up and down completely randomly.
Pair Corralation between Samsung Card and Industrial Bank
Assuming the 90 days trading horizon Samsung Card Co is expected to generate 1.35 times more return on investment than Industrial Bank. However, Samsung Card is 1.35 times more volatile than Industrial Bank. It trades about 0.34 of its potential returns per unit of risk. Industrial Bank is currently generating about 0.01 per unit of risk. If you would invest 4,200,000 in Samsung Card Co on November 27, 2024 and sell it today you would earn a total of 270,000 from holding Samsung Card Co or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Card Co vs. Industrial Bank
Performance |
| Timeline |
| Samsung Card |
| Industrial Bank |
Samsung Card and Industrial Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Card and Industrial Bank
The main advantage of trading using opposite Samsung Card and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Card position performs unexpectedly, Industrial Bank 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 Industrial Bank will offset losses from the drop in Industrial Bank's long position.| Samsung Card vs. UJU Electronics Co | Samsung Card vs. Daesung Hi Tech Co | Samsung Card vs. Sangshin Electronics Co | Samsung Card vs. DAEDUCK ELECTRONICS CoLtd |
| Industrial Bank vs. Hanjoo Light Metal | Industrial Bank vs. Sempio Foods Co | Industrial Bank vs. Dongil Metal Co | Industrial Bank vs. Daesung Hi Tech 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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