Correlation Between Samsung Life and Doosan Fuel
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Doosan Fuel 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 Doosan Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and Doosan Fuel Cell, you can compare the effects of market volatilities on Samsung Life and Doosan Fuel 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 Doosan Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Doosan Fuel.
Diversification Opportunities for Samsung Life and Doosan Fuel
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Doosan is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and Doosan Fuel Cell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan Fuel Cell 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 Doosan Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doosan Fuel Cell has no effect on the direction of Samsung Life i.e., Samsung Life and Doosan Fuel go up and down completely randomly.
Pair Corralation between Samsung Life and Doosan Fuel
Assuming the 90 days trading horizon Samsung Life is expected to generate 0.74 times more return on investment than Doosan Fuel. However, Samsung Life is 1.35 times less risky than Doosan Fuel. It trades about 0.05 of its potential returns per unit of risk. Doosan Fuel Cell is currently generating about -0.03 per unit of risk. If you would invest 6,977,507 in Samsung Life on August 29, 2024 and sell it today you would earn a total of 3,922,493 from holding Samsung Life or generate 56.22% 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. Doosan Fuel Cell
Performance |
| Timeline |
| Samsung Life |
| Doosan Fuel Cell |
Samsung Life and Doosan Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Doosan Fuel
The main advantage of trading using opposite Samsung Life and Doosan Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Doosan Fuel 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 Doosan Fuel will offset losses from the drop in Doosan Fuel's long position.| Samsung Life vs. Wireless Power Amplifier | Samsung Life vs. LB Investment | Samsung Life vs. LG Chemicals | Samsung Life vs. Korea Investment Holdings |
| Doosan Fuel vs. LS Electric | Doosan Fuel vs. Busan Industrial Co | Doosan Fuel vs. Busan Ind | Doosan Fuel vs. Mirae Asset Daewoo |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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