Correlation Between Samsung Life and SFA Engineering
Can any of the company-specific risk be diversified away by investing in both Samsung Life and SFA Engineering 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 SFA Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and SFA Engineering, you can compare the effects of market volatilities on Samsung Life and SFA Engineering 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 SFA Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and SFA Engineering.
Diversification Opportunities for Samsung Life and SFA Engineering
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and SFA is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and SFA Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFA Engineering 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 SFA Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFA Engineering has no effect on the direction of Samsung Life i.e., Samsung Life and SFA Engineering go up and down completely randomly.
Pair Corralation between Samsung Life and SFA Engineering
Assuming the 90 days trading horizon Samsung Life is expected to generate 0.8 times more return on investment than SFA Engineering. However, Samsung Life is 1.25 times less risky than SFA Engineering. It trades about 0.07 of its potential returns per unit of risk. SFA Engineering is currently generating about -0.04 per unit of risk. If you would invest 10,250,000 in Samsung Life on August 27, 2024 and sell it today you would earn a total of 400,000 from holding Samsung Life or generate 3.9% 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. SFA Engineering
Performance |
| Timeline |
| Samsung Life |
| SFA Engineering |
Samsung Life and SFA Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and SFA Engineering
The main advantage of trading using opposite Samsung Life and SFA Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, SFA Engineering 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 SFA Engineering will offset losses from the drop in SFA Engineering's long position.| Samsung Life vs. Korea New Network | Samsung Life vs. Dong A Eltek | Samsung Life vs. Dreamus Company | Samsung Life vs. SK Bioscience Co |
| SFA Engineering vs. Korea Real Estate | SFA Engineering vs. Korea Ratings Co | SFA Engineering vs. IQuest Co | SFA Engineering vs. Wonbang Tech 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |