Correlation Between Samsung Life and Daebo Magnetic
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Daebo Magnetic 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 Daebo Magnetic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and Daebo Magnetic CoLtd, you can compare the effects of market volatilities on Samsung Life and Daebo Magnetic 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 Daebo Magnetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Daebo Magnetic.
Diversification Opportunities for Samsung Life and Daebo Magnetic
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Daebo is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and Daebo Magnetic CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daebo Magnetic CoLtd 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 Daebo Magnetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daebo Magnetic CoLtd has no effect on the direction of Samsung Life i.e., Samsung Life and Daebo Magnetic go up and down completely randomly.
Pair Corralation between Samsung Life and Daebo Magnetic
Assuming the 90 days trading horizon Samsung Life is expected to generate 0.63 times more return on investment than Daebo Magnetic. However, Samsung Life is 1.58 times less risky than Daebo Magnetic. It trades about 0.05 of its potential returns per unit of risk. Daebo Magnetic CoLtd is currently generating about -0.09 per unit of risk. If you would invest 7,092,521 in Samsung Life on September 2, 2024 and sell it today you would earn a total of 3,617,479 from holding Samsung Life or generate 51.0% 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. Daebo Magnetic CoLtd
Performance |
| Timeline |
| Samsung Life |
| Daebo Magnetic CoLtd |
Samsung Life and Daebo Magnetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Daebo Magnetic
The main advantage of trading using opposite Samsung Life and Daebo Magnetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Daebo Magnetic 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 Daebo Magnetic will offset losses from the drop in Daebo Magnetic's long position.| Samsung Life vs. HJ ShipBuilding Construction | Samsung Life vs. Woori Technology Investment | Samsung Life vs. SEOJEON ELECTRIC MACHINERY | Samsung Life vs. SV Investment |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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