Correlation Between Samsung Life and SBI Investment
Can any of the company-specific risk be diversified away by investing in both Samsung Life and SBI Investment 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 SBI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and SBI Investment KOREA, you can compare the effects of market volatilities on Samsung Life and SBI Investment 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 SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and SBI Investment.
Diversification Opportunities for Samsung Life and SBI Investment
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and SBI is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and SBI Investment KOREA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Investment KOREA 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 SBI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Investment KOREA has no effect on the direction of Samsung Life i.e., Samsung Life and SBI Investment go up and down completely randomly.
Pair Corralation between Samsung Life and SBI Investment
Assuming the 90 days trading horizon Samsung Life is expected to generate 0.94 times more return on investment than SBI Investment. However, Samsung Life is 1.07 times less risky than SBI Investment. It trades about 0.06 of its potential returns per unit of risk. SBI Investment KOREA is currently generating about -0.04 per unit of risk. If you would invest 6,574,958 in Samsung Life on August 24, 2024 and sell it today you would earn a total of 4,075,042 from holding Samsung Life or generate 61.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Life vs. SBI Investment KOREA
Performance |
| Timeline |
| Samsung Life |
| SBI Investment KOREA |
Samsung Life and SBI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and SBI Investment
The main advantage of trading using opposite Samsung Life and SBI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, SBI Investment 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 SBI Investment will offset losses from the drop in SBI Investment's long position.| Samsung Life vs. Dongil Metal Co | Samsung Life vs. Lotte Non Life Insurance | Samsung Life vs. CJ Seafood Corp | Samsung Life vs. Youngsin Metal Industrial |
| SBI Investment vs. Korea New Network | SBI Investment vs. Dong A Eltek | SBI Investment vs. Dreamus Company | SBI Investment vs. SK Bioscience 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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