Correlation Between Samsung Life and SGC ETEC
Can any of the company-specific risk be diversified away by investing in both Samsung Life and SGC ETEC 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 SGC ETEC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and SGC eTEC EC, you can compare the effects of market volatilities on Samsung Life and SGC ETEC 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 SGC ETEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and SGC ETEC.
Diversification Opportunities for Samsung Life and SGC ETEC
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samsung and SGC is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and SGC eTEC EC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGC eTEC EC 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 SGC ETEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGC eTEC EC has no effect on the direction of Samsung Life i.e., Samsung Life and SGC ETEC go up and down completely randomly.
Pair Corralation between Samsung Life and SGC ETEC
Assuming the 90 days trading horizon Samsung Life is expected to under-perform the SGC ETEC. In addition to that, Samsung Life is 2.79 times more volatile than SGC eTEC EC. It trades about -0.02 of its total potential returns per unit of risk. SGC eTEC EC is currently generating about 0.27 per unit of volatility. If you would invest 1,315,000 in SGC eTEC EC on December 1, 2024 and sell it today you would earn a total of 92,000 from holding SGC eTEC EC or generate 7.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Samsung Life vs. SGC eTEC EC
Performance |
| Timeline |
| Samsung Life |
| SGC eTEC EC |
Samsung Life and SGC ETEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and SGC ETEC
The main advantage of trading using opposite Samsung Life and SGC ETEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, SGC ETEC 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 SGC ETEC will offset losses from the drop in SGC ETEC'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 |
| SGC ETEC vs. Nable Communications | SGC ETEC vs. E Investment Development | SGC ETEC vs. Korea Information Communications | SGC ETEC vs. Lotte Data Communication |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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