Correlation Between Samsung Life and SMCoreInc
Can any of the company-specific risk be diversified away by investing in both Samsung Life and SMCoreInc 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 SMCoreInc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and SMCoreInc, you can compare the effects of market volatilities on Samsung Life and SMCoreInc 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 SMCoreInc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and SMCoreInc.
Diversification Opportunities for Samsung Life and SMCoreInc
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and SMCoreInc is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and SMCoreInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMCoreInc 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 SMCoreInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMCoreInc has no effect on the direction of Samsung Life i.e., Samsung Life and SMCoreInc go up and down completely randomly.
Pair Corralation between Samsung Life and SMCoreInc
Assuming the 90 days trading horizon Samsung Life is expected to generate 0.87 times more return on investment than SMCoreInc. However, Samsung Life is 1.15 times less risky than SMCoreInc. It trades about 0.05 of its potential returns per unit of risk. SMCoreInc is currently generating about -0.02 per unit of risk. If you would invest 7,070,000 in Samsung Life on September 3, 2024 and sell it today you would earn a total of 3,640,000 from holding Samsung Life or generate 51.49% 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. SMCoreInc
Performance |
| Timeline |
| Samsung Life |
| SMCoreInc |
Samsung Life and SMCoreInc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and SMCoreInc
The main advantage of trading using opposite Samsung Life and SMCoreInc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, SMCoreInc 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 SMCoreInc will offset losses from the drop in SMCoreInc'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 |
| SMCoreInc vs. LG Display | SMCoreInc vs. Hyundai Motor | SMCoreInc vs. Hyundai Motor Co | SMCoreInc vs. Hyundai Motor 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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