Correlation Between Samsung Life and Seoul Electronics
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Seoul Electronics 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 Seoul Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and Seoul Electronics Telecom, you can compare the effects of market volatilities on Samsung Life and Seoul Electronics 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 Seoul Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Seoul Electronics.
Diversification Opportunities for Samsung Life and Seoul Electronics
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Seoul is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and Seoul Electronics Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Electronics Telecom 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 Seoul Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Electronics Telecom has no effect on the direction of Samsung Life i.e., Samsung Life and Seoul Electronics go up and down completely randomly.
Pair Corralation between Samsung Life and Seoul Electronics
Assuming the 90 days trading horizon Samsung Life is expected to generate 2.08 times more return on investment than Seoul Electronics. However, Samsung Life is 2.08 times more volatile than Seoul Electronics Telecom. It trades about 0.09 of its potential returns per unit of risk. Seoul Electronics Telecom is currently generating about -0.36 per unit of risk. If you would invest 10,150,000 in Samsung Life on September 1, 2024 and sell it today you would earn a total of 560,000 from holding Samsung Life or generate 5.52% 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. Seoul Electronics Telecom
Performance |
| Timeline |
| Samsung Life |
| Seoul Electronics Telecom |
Samsung Life and Seoul Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Seoul Electronics
The main advantage of trading using opposite Samsung Life and Seoul Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Seoul Electronics 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 Seoul Electronics will offset losses from the drop in Seoul Electronics' long position.| Samsung Life vs. Ilji Technology Co | Samsung Life vs. Daou Technology | Samsung Life vs. Polaris Office Corp | Samsung Life vs. AurosTechnology |
| Seoul Electronics vs. Korea New Network | Seoul Electronics vs. ICD Co | Seoul Electronics vs. DYPNF CoLtd | Seoul Electronics vs. Busan Industrial 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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