Correlation Between Samsung Life and KM
Can any of the company-specific risk be diversified away by investing in both Samsung Life and KM 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 KM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and KM Corporation, you can compare the effects of market volatilities on Samsung Life and KM 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 KM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and KM.
Diversification Opportunities for Samsung Life and KM
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and KM is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and KM Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KM Corporation 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 KM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KM Corporation has no effect on the direction of Samsung Life i.e., Samsung Life and KM go up and down completely randomly.
Pair Corralation between Samsung Life and KM
Assuming the 90 days trading horizon Samsung Life is expected to generate 0.78 times more return on investment than KM. However, Samsung Life is 1.28 times less risky than KM. It trades about 0.01 of its potential returns per unit of risk. KM Corporation is currently generating about -0.02 per unit of risk. If you would invest 9,220,000 in Samsung Life on October 22, 2024 and sell it today you would lose (410,000) from holding Samsung Life or give up 4.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Life vs. KM Corp.
Performance |
| Timeline |
| Samsung Life |
| KM Corporation |
Samsung Life and KM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and KM
The main advantage of trading using opposite Samsung Life and KM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, KM 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 KM will offset losses from the drop in KM's long position.| Samsung Life vs. A Tech Solution Co | Samsung Life vs. BIT Computer Co | Samsung Life vs. Lotte Data Communication | Samsung Life vs. PH Tech Co |
| KM vs. Namhae Chemical | KM vs. Kyung In Synthetic Corp | KM vs. Youngbo Chemical Co | KM vs. Hanjoo Light Metal |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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