Correlation Between Samsung Life and MPLUS Corp
Can any of the company-specific risk be diversified away by investing in both Samsung Life and MPLUS Corp 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 MPLUS Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and mPLUS Corp, you can compare the effects of market volatilities on Samsung Life and MPLUS Corp 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 MPLUS Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and MPLUS Corp.
Diversification Opportunities for Samsung Life and MPLUS Corp
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and MPLUS is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and mPLUS Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mPLUS Corp 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 MPLUS Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mPLUS Corp has no effect on the direction of Samsung Life i.e., Samsung Life and MPLUS Corp go up and down completely randomly.
Pair Corralation between Samsung Life and MPLUS Corp
Assuming the 90 days trading horizon Samsung Life is expected to generate 0.77 times more return on investment than MPLUS Corp. However, Samsung Life is 1.29 times less risky than MPLUS Corp. It trades about 0.02 of its potential returns per unit of risk. mPLUS Corp is currently generating about 0.02 per unit of risk. If you would invest 10,100,000 in Samsung Life on September 13, 2024 and sell it today you would earn a total of 50,000 from holding Samsung Life or generate 0.5% 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. mPLUS Corp
Performance |
| Timeline |
| Samsung Life |
| mPLUS Corp |
Samsung Life and MPLUS Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and MPLUS Corp
The main advantage of trading using opposite Samsung Life and MPLUS Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, MPLUS Corp 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 MPLUS Corp will offset losses from the drop in MPLUS Corp's long position.| Samsung Life vs. Mirai Semiconductors Co | Samsung Life vs. Hannong Chemicals | Samsung Life vs. Youl Chon Chemical | Samsung Life vs. Seoul Semiconductor Co |
| MPLUS Corp vs. Samick Musical Instruments | MPLUS Corp vs. Hanmi Semiconductor Co | MPLUS Corp vs. ITM Semiconductor Co | MPLUS Corp vs. Samyung Trading 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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