Correlation Between Samsung Life and MohenzCoLtd
Can any of the company-specific risk be diversified away by investing in both Samsung Life and MohenzCoLtd 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 MohenzCoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and MohenzCoLtd, you can compare the effects of market volatilities on Samsung Life and MohenzCoLtd 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 MohenzCoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and MohenzCoLtd.
Diversification Opportunities for Samsung Life and MohenzCoLtd
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and MohenzCoLtd is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and MohenzCoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MohenzCoLtd 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 MohenzCoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MohenzCoLtd has no effect on the direction of Samsung Life i.e., Samsung Life and MohenzCoLtd go up and down completely randomly.
Pair Corralation between Samsung Life and MohenzCoLtd
Assuming the 90 days trading horizon Samsung Life is expected to generate 0.68 times more return on investment than MohenzCoLtd. However, Samsung Life is 1.47 times less risky than MohenzCoLtd. It trades about 0.05 of its potential returns per unit of risk. MohenzCoLtd is currently generating about -0.02 per unit of risk. If you would invest 7,054,183 in Samsung Life on September 3, 2024 and sell it today you would earn a total of 3,655,817 from holding Samsung Life or generate 51.82% 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. MohenzCoLtd
Performance |
| Timeline |
| Samsung Life |
| MohenzCoLtd |
Samsung Life and MohenzCoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and MohenzCoLtd
The main advantage of trading using opposite Samsung Life and MohenzCoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, MohenzCoLtd 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 MohenzCoLtd will offset losses from the drop in MohenzCoLtd's long position.| Samsung Life vs. Dongil Metal Co | Samsung Life vs. Tuksu Engineering ConstructionLtd | Samsung Life vs. Daiyang Metal Co | Samsung Life vs. Seohee Construction Co |
| MohenzCoLtd vs. LG Chemicals | MohenzCoLtd vs. POSCO Holdings | MohenzCoLtd vs. Hanwha Solutions | MohenzCoLtd vs. Lotte Chemical Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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