Correlation Between Samsung Life and EO Technics
Can any of the company-specific risk be diversified away by investing in both Samsung Life and EO Technics 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 EO Technics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and EO Technics Co, you can compare the effects of market volatilities on Samsung Life and EO Technics 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 EO Technics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and EO Technics.
Diversification Opportunities for Samsung Life and EO Technics
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and 039030 is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and EO Technics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EO Technics 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 EO Technics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EO Technics has no effect on the direction of Samsung Life i.e., Samsung Life and EO Technics go up and down completely randomly.
Pair Corralation between Samsung Life and EO Technics
Assuming the 90 days trading horizon Samsung Life is expected to generate 1.8 times less return on investment than EO Technics. But when comparing it to its historical volatility, Samsung Life is 1.82 times less risky than EO Technics. It trades about 0.05 of its potential returns per unit of risk. EO Technics Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,650,496 in EO Technics Co on December 8, 2024 and sell it today you would earn a total of 4,899,504 from holding EO Technics Co or generate 64.04% 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. EO Technics Co
Performance |
| Timeline |
| Samsung Life |
| EO Technics |
Samsung Life and EO Technics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and EO Technics
The main advantage of trading using opposite Samsung Life and EO Technics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, EO Technics 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 EO Technics will offset losses from the drop in EO Technics' long position.| Samsung Life vs. Guyoung Technology Co | ||
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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