Correlation Between Samsung Life and SAMRYOONG CoLtd
Can any of the company-specific risk be diversified away by investing in both Samsung Life and SAMRYOONG CoLtd 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 SAMRYOONG CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and SAMRYOONG CoLtd, you can compare the effects of market volatilities on Samsung Life and SAMRYOONG CoLtd 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 SAMRYOONG CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and SAMRYOONG CoLtd.
Diversification Opportunities for Samsung Life and SAMRYOONG CoLtd
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and SAMRYOONG is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and SAMRYOONG CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAMRYOONG CoLtd 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 SAMRYOONG CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAMRYOONG CoLtd has no effect on the direction of Samsung Life i.e., Samsung Life and SAMRYOONG CoLtd go up and down completely randomly.
Pair Corralation between Samsung Life and SAMRYOONG CoLtd
Assuming the 90 days trading horizon Samsung Life is expected to under-perform the SAMRYOONG CoLtd. In addition to that, Samsung Life is 2.84 times more volatile than SAMRYOONG CoLtd. It trades about -0.02 of its total potential returns per unit of risk. SAMRYOONG CoLtd is currently generating about 0.05 per unit of volatility. If you would invest 295,000 in SAMRYOONG CoLtd on December 1, 2024 and sell it today you would earn a total of 3,500 from holding SAMRYOONG CoLtd or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Samsung Life vs. SAMRYOONG CoLtd
Performance |
| Timeline |
| Samsung Life |
| SAMRYOONG CoLtd |
Samsung Life and SAMRYOONG CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and SAMRYOONG CoLtd
The main advantage of trading using opposite Samsung Life and SAMRYOONG CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, SAMRYOONG CoLtd 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 SAMRYOONG CoLtd will offset losses from the drop in SAMRYOONG CoLtd'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 |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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