Correlation Between Samsung Life and Innowireless
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Innowireless 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 Innowireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and Innowireless Co, you can compare the effects of market volatilities on Samsung Life and Innowireless 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 Innowireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Innowireless.
Diversification Opportunities for Samsung Life and Innowireless
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Innowireless is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and Innowireless Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innowireless 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 Innowireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innowireless has no effect on the direction of Samsung Life i.e., Samsung Life and Innowireless go up and down completely randomly.
Pair Corralation between Samsung Life and Innowireless
Assuming the 90 days trading horizon Samsung Life is expected to under-perform the Innowireless. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Life is 1.02 times less risky than Innowireless. The stock trades about -0.16 of its potential returns per unit of risk. The Innowireless Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,762,000 in Innowireless Co on October 17, 2024 and sell it today you would earn a total of 263,000 from holding Innowireless Co or generate 14.93% 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. Innowireless Co
Performance |
| Timeline |
| Samsung Life |
| Innowireless |
Samsung Life and Innowireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Innowireless
The main advantage of trading using opposite Samsung Life and Innowireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Innowireless 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 Innowireless will offset losses from the drop in Innowireless' long position.| Samsung Life vs. Koryo Credit Information | Samsung Life vs. Choil Aluminum | Samsung Life vs. Kbi Metal Co | Samsung Life vs. iNtRON Biotechnology |
| Innowireless vs. NICE Information Service | Innowireless vs. Iljin Display | Innowireless vs. Lotte Data Communication | Innowireless vs. Ssangyong Information Communication |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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