Correlation Between Samsung Life and Dongil Metal
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Dongil Metal 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 Dongil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and Dongil Metal Co, you can compare the effects of market volatilities on Samsung Life and Dongil Metal 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 Dongil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Dongil Metal.
Diversification Opportunities for Samsung Life and Dongil Metal
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Dongil is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and Dongil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Metal 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 Dongil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Metal has no effect on the direction of Samsung Life i.e., Samsung Life and Dongil Metal go up and down completely randomly.
Pair Corralation between Samsung Life and Dongil Metal
Assuming the 90 days trading horizon Samsung Life is expected to generate 0.75 times more return on investment than Dongil Metal. However, Samsung Life is 1.34 times less risky than Dongil Metal. It trades about 0.06 of its potential returns per unit of risk. Dongil Metal Co is currently generating about -0.06 per unit of risk. If you would invest 6,574,958 in Samsung Life on August 24, 2024 and sell it today you would earn a total of 4,075,042 from holding Samsung Life or generate 61.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.52% |
| Values | Daily Returns |
Samsung Life vs. Dongil Metal Co
Performance |
| Timeline |
| Samsung Life |
| Dongil Metal |
Samsung Life and Dongil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Dongil Metal
The main advantage of trading using opposite Samsung Life and Dongil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Dongil Metal 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 Dongil Metal will offset losses from the drop in Dongil Metal's long position.| Samsung Life vs. Dongil Metal Co | Samsung Life vs. Lotte Non Life Insurance | Samsung Life vs. CJ Seafood Corp | Samsung Life vs. Youngsin Metal Industrial |
| Dongil Metal vs. LG Chemicals | Dongil Metal vs. POSCO Holdings | Dongil Metal vs. Lotte Chemical Corp | Dongil Metal vs. Hyundai Steel |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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