Correlation Between Samsung Card and Paradise
Can any of the company-specific risk be diversified away by investing in both Samsung Card and Paradise 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 Paradise 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 Paradise Co, you can compare the effects of market volatilities on Samsung Card and Paradise 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 Paradise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Card and Paradise.
Diversification Opportunities for Samsung Card and Paradise
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Samsung and Paradise is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Card Co and Paradise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paradise 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 Paradise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paradise has no effect on the direction of Samsung Card i.e., Samsung Card and Paradise go up and down completely randomly.
Pair Corralation between Samsung Card and Paradise
Assuming the 90 days trading horizon Samsung Card Co is expected to generate 0.8 times more return on investment than Paradise. However, Samsung Card Co is 1.25 times less risky than Paradise. It trades about 0.06 of its potential returns per unit of risk. Paradise Co is currently generating about -0.05 per unit of risk. If you would invest 3,940,000 in Samsung Card Co on September 26, 2024 and sell it today you would earn a total of 150,000 from holding Samsung Card Co or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Samsung Card Co vs. Paradise Co
Performance |
| Timeline |
| Samsung Card |
| Paradise |
Samsung Card and Paradise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Card and Paradise
The main advantage of trading using opposite Samsung Card and Paradise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Card position performs unexpectedly, Paradise 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 Paradise will offset losses from the drop in Paradise's long position.| Samsung Card vs. KB Financial Group | Samsung Card vs. Shinhan Financial Group | Samsung Card vs. Hyundai Motor | Samsung Card vs. Hyundai Motor Co |
| Paradise vs. Woori Technology Investment | Paradise vs. Samsung Card Co | Paradise vs. Korea Real Estate | Paradise vs. CHOROKBAEM PANY 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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