Correlation Between Samsung Life and Lotte Fine
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Lotte Fine 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 Lotte Fine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and Lotte Fine Chemical, you can compare the effects of market volatilities on Samsung Life and Lotte Fine 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 Lotte Fine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Lotte Fine.
Diversification Opportunities for Samsung Life and Lotte Fine
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and Lotte is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and Lotte Fine Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Fine Chemical 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 Lotte Fine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Fine Chemical has no effect on the direction of Samsung Life i.e., Samsung Life and Lotte Fine go up and down completely randomly.
Pair Corralation between Samsung Life and Lotte Fine
Assuming the 90 days trading horizon Samsung Life is expected to under-perform the Lotte Fine. In addition to that, Samsung Life is 1.75 times more volatile than Lotte Fine Chemical. It trades about -0.06 of its total potential returns per unit of risk. Lotte Fine Chemical is currently generating about 0.05 per unit of volatility. If you would invest 3,935,000 in Lotte Fine Chemical on November 30, 2024 and sell it today you would earn a total of 115,000 from holding Lotte Fine Chemical or generate 2.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Life vs. Lotte Fine Chemical
Performance |
| Timeline |
| Samsung Life |
| Lotte Fine Chemical |
Samsung Life and Lotte Fine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Lotte Fine
The main advantage of trading using opposite Samsung Life and Lotte Fine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Lotte Fine 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 Lotte Fine will offset losses from the drop in Lotte Fine's long position.| Samsung Life vs. Keyang Electric Machinery | Samsung Life vs. Dongbang Ship Machinery | Samsung Life vs. Kaonmedia Co | Samsung Life vs. Seohee Construction Co |
| Lotte Fine vs. Jb Financial | Lotte Fine vs. Hanwha Life Insurance | Lotte Fine vs. InfoBank | Lotte Fine vs. Hana Financial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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