Correlation Between Samsung Life and Seah Steel
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Seah Steel 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 Life and Seah Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and Seah Steel Corp, you can compare the effects of market volatilities on Samsung Life and Seah Steel 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 Life with a short position of Seah Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Seah Steel.
Diversification Opportunities for Samsung Life and Seah Steel
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Seah is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and Seah Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seah Steel Corp and Samsung Life 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 Life are associated (or correlated) with Seah Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seah Steel Corp has no effect on the direction of Samsung Life i.e., Samsung Life and Seah Steel go up and down completely randomly.
Pair Corralation between Samsung Life and Seah Steel
Assuming the 90 days trading horizon Samsung Life is expected to generate 0.99 times more return on investment than Seah Steel. However, Samsung Life is 1.01 times less risky than Seah Steel. It trades about 0.03 of its potential returns per unit of risk. Seah Steel Corp is currently generating about 0.01 per unit of risk. If you would invest 8,140,000 in Samsung Life on November 3, 2024 and sell it today you would earn a total of 770,000 from holding Samsung Life or generate 9.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Life vs. Seah Steel Corp
Performance |
| Timeline |
| Samsung Life |
| Seah Steel Corp |
Samsung Life and Seah Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Seah Steel
The main advantage of trading using opposite Samsung Life and Seah Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Seah Steel 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 Seah Steel will offset losses from the drop in Seah Steel's long position.| Samsung Life vs. Sempio Foods Co | Samsung Life vs. Atinum Investment Co | Samsung Life vs. Woori Technology Investment | Samsung Life vs. Samyang Foods Co |
| Seah Steel vs. Inzi Display CoLtd | Seah Steel vs. Sangsin Energy Display | Seah Steel vs. Ssangyong Information Communication | Seah Steel vs. Kukil Metal 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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