Correlation Between Samsung Life and Dongwha Enterprise
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Dongwha Enterprise 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 Dongwha Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and Dongwha Enterprise CoLtd, you can compare the effects of market volatilities on Samsung Life and Dongwha Enterprise 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 Dongwha Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Dongwha Enterprise.
Diversification Opportunities for Samsung Life and Dongwha Enterprise
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Dongwha is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and Dongwha Enterprise CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwha Enterprise 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 Dongwha Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwha Enterprise CoLtd has no effect on the direction of Samsung Life i.e., Samsung Life and Dongwha Enterprise go up and down completely randomly.
Pair Corralation between Samsung Life and Dongwha Enterprise
Assuming the 90 days trading horizon Samsung Life is expected to generate 0.89 times more return on investment than Dongwha Enterprise. However, Samsung Life is 1.12 times less risky than Dongwha Enterprise. It trades about 0.05 of its potential returns per unit of risk. Dongwha Enterprise CoLtd is currently generating about -0.29 per unit of risk. If you would invest 10,400,000 in Samsung Life on September 4, 2024 and sell it today you would earn a total of 260,000 from holding Samsung Life or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Life vs. Dongwha Enterprise CoLtd
Performance |
| Timeline |
| Samsung Life |
| Dongwha Enterprise CoLtd |
Samsung Life and Dongwha Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Dongwha Enterprise
The main advantage of trading using opposite Samsung Life and Dongwha Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Dongwha Enterprise 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 Dongwha Enterprise will offset losses from the drop in Dongwha Enterprise's long position.| Samsung Life vs. DAEDUCK ELECTRONICS CoLtd | Samsung Life vs. Automobile Pc | Samsung Life vs. Netmarble Games Corp | Samsung Life vs. UJU Electronics Co |
| Dongwha Enterprise vs. Ananti Inc | Dongwha Enterprise vs. InBody CoLtd | Dongwha Enterprise vs. Dongsin Engineering Construction | Dongwha Enterprise vs. LF 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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