Correlation Between Samsung Life and Seoul Broadcasting
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Seoul Broadcasting 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 Broadcasting 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 Broadcasting System, you can compare the effects of market volatilities on Samsung Life and Seoul Broadcasting 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 Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Seoul Broadcasting.
Diversification Opportunities for Samsung Life and Seoul Broadcasting
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Seoul is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and Seoul Broadcasting System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Broadcasting System 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 Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Broadcasting System has no effect on the direction of Samsung Life i.e., Samsung Life and Seoul Broadcasting go up and down completely randomly.
Pair Corralation between Samsung Life and Seoul Broadcasting
Assuming the 90 days trading horizon Samsung Life is expected to under-perform the Seoul Broadcasting. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Life is 4.12 times less risky than Seoul Broadcasting. The stock trades about -0.2 of its potential returns per unit of risk. The Seoul Broadcasting System is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,000,000 in Seoul Broadcasting System on October 21, 2024 and sell it today you would earn a total of 440,000 from holding Seoul Broadcasting System or generate 22.0% 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. Seoul Broadcasting System
Performance |
| Timeline |
| Samsung Life |
| Seoul Broadcasting System |
Samsung Life and Seoul Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Seoul Broadcasting
The main advantage of trading using opposite Samsung Life and Seoul Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Seoul Broadcasting 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 Broadcasting will offset losses from the drop in Seoul Broadcasting's long position.| Samsung Life vs. Digital Power Communications | Samsung Life vs. Nice Information Telecommunication | Samsung Life vs. Kakao Games Corp | Samsung Life vs. Seoul Electronics Telecom |
| Seoul Broadcasting vs. BooKook Steel Co | Seoul Broadcasting vs. SH Energy Chemical | Seoul Broadcasting vs. Genie Music | Seoul Broadcasting vs. Hyundai BNG Steel |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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