Correlation Between Samsung Life and People Technology
Can any of the company-specific risk be diversified away by investing in both Samsung Life and People Technology 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 People Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and People Technology, you can compare the effects of market volatilities on Samsung Life and People Technology 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 People Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and People Technology.
Diversification Opportunities for Samsung Life and People Technology
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and People is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and People Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on People Technology 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 People Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of People Technology has no effect on the direction of Samsung Life i.e., Samsung Life and People Technology go up and down completely randomly.
Pair Corralation between Samsung Life and People Technology
Assuming the 90 days trading horizon Samsung Life is expected to generate 0.6 times more return on investment than People Technology. However, Samsung Life is 1.67 times less risky than People Technology. It trades about 0.07 of its potential returns per unit of risk. People Technology is currently generating about 0.03 per unit of risk. If you would invest 8,830,000 in Samsung Life on September 3, 2024 and sell it today you would earn a total of 1,880,000 from holding Samsung Life or generate 21.29% 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. People Technology
Performance |
| Timeline |
| Samsung Life |
| People Technology |
Samsung Life and People Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and People Technology
The main advantage of trading using opposite Samsung Life and People Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, People Technology 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 People Technology will offset losses from the drop in People Technology's long position.| Samsung Life vs. Dongil Metal Co | Samsung Life vs. Tuksu Engineering ConstructionLtd | Samsung Life vs. Daiyang Metal Co | Samsung Life vs. Seohee Construction Co |
| People Technology vs. LG Display | People Technology vs. Hyundai Motor | People Technology vs. Hyundai Motor Co | People Technology vs. Hyundai Motor 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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