Correlation Between Samsung Life and Wireless Power
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Wireless Power 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 Wireless Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and Wireless Power Amplifier, you can compare the effects of market volatilities on Samsung Life and Wireless Power 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 Wireless Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Wireless Power.
Diversification Opportunities for Samsung Life and Wireless Power
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Wireless is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and Wireless Power Amplifier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Power Amplifier 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 Wireless Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Power Amplifier has no effect on the direction of Samsung Life i.e., Samsung Life and Wireless Power go up and down completely randomly.
Pair Corralation between Samsung Life and Wireless Power
Assuming the 90 days trading horizon Samsung Life is expected to generate 0.99 times more return on investment than Wireless Power. However, Samsung Life is 1.01 times less risky than Wireless Power. It trades about 0.02 of its potential returns per unit of risk. Wireless Power Amplifier is currently generating about -0.08 per unit of risk. If you would invest 10,450,000 in Samsung Life on September 1, 2024 and sell it today you would earn a total of 260,000 from holding Samsung Life or generate 2.49% 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. Wireless Power Amplifier
Performance |
| Timeline |
| Samsung Life |
| Wireless Power Amplifier |
Samsung Life and Wireless Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Wireless Power
The main advantage of trading using opposite Samsung Life and Wireless Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Wireless Power 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 Wireless Power will offset losses from the drop in Wireless Power's long position.| Samsung Life vs. Ilji Technology Co | Samsung Life vs. Daou Technology | Samsung Life vs. Polaris Office Corp | Samsung Life vs. AurosTechnology |
| Wireless Power vs. Daejoo Electronic Materials | Wireless Power vs. Parksystems Corp | Wireless Power vs. BH Co | Wireless Power vs. Partron 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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