Correlation Between Samsung Life and CNH
Can any of the company-specific risk be diversified away by investing in both Samsung Life and CNH 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 CNH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and CNH Co, you can compare the effects of market volatilities on Samsung Life and CNH 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 CNH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and CNH.
Diversification Opportunities for Samsung Life and CNH
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and CNH is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and CNH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNH Co 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 CNH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNH Co has no effect on the direction of Samsung Life i.e., Samsung Life and CNH go up and down completely randomly.
Pair Corralation between Samsung Life and CNH
Assuming the 90 days trading horizon Samsung Life is expected to generate 0.29 times more return on investment than CNH. However, Samsung Life is 3.47 times less risky than CNH. It trades about 0.09 of its potential returns per unit of risk. CNH Co is currently generating about -1.08 per unit of risk. If you would invest 10,250,000 in Samsung Life on August 30, 2024 and sell it today you would earn a total of 540,000 from holding Samsung Life or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 21.74% |
| Values | Daily Returns |
Samsung Life vs. CNH Co
Performance |
| Timeline |
| Samsung Life |
| CNH Co |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Samsung Life and CNH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and CNH
The main advantage of trading using opposite Samsung Life and CNH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, CNH 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 CNH will offset losses from the drop in CNH's long position.| Samsung Life vs. Cube Entertainment | Samsung Life vs. Dreamus Company | Samsung Life vs. LG Energy Solution | Samsung Life vs. Dongwon System |
| CNH vs. Inzi Display CoLtd | CNH vs. ABCO Electronics Co | CNH vs. LG Household Healthcare | CNH vs. Shinil Electronics 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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