Correlation Between Samsung Life and Seohee Construction
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Seohee Construction 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 Seohee Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and Seohee Construction Co, you can compare the effects of market volatilities on Samsung Life and Seohee Construction 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 Seohee Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Seohee Construction.
Diversification Opportunities for Samsung Life and Seohee Construction
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Seohee is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and Seohee Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seohee Construction 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 Seohee Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seohee Construction has no effect on the direction of Samsung Life i.e., Samsung Life and Seohee Construction go up and down completely randomly.
Pair Corralation between Samsung Life and Seohee Construction
Assuming the 90 days trading horizon Samsung Life is expected to generate 1.31 times more return on investment than Seohee Construction. However, Samsung Life is 1.31 times more volatile than Seohee Construction Co. It trades about 0.05 of its potential returns per unit of risk. Seohee Construction Co is currently generating about 0.05 per unit of risk. If you would invest 6,085,129 in Samsung Life on November 9, 2024 and sell it today you would earn a total of 3,394,871 from holding Samsung Life or generate 55.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Life vs. Seohee Construction Co
Performance |
| Timeline |
| Samsung Life |
| Seohee Construction |
Samsung Life and Seohee Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Seohee Construction
The main advantage of trading using opposite Samsung Life and Seohee Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Seohee Construction 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 Seohee Construction will offset losses from the drop in Seohee Construction's long position.| Samsung Life vs. Hankook Steel Co | Samsung Life vs. Bookook Steel | Samsung Life vs. Dong A Steel Technology | Samsung Life vs. Seoul Semiconductor Co |
| Seohee Construction vs. KCC Engineering Construction | Seohee Construction vs. Samchuly Bicycle Co | Seohee Construction vs. SFA Engineering | Seohee Construction vs. SEOHAN Const EngcoLtd |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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