Correlation Between Samsung Life and Lotte Chilsung
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Lotte Chilsung 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 Lotte Chilsung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life Insurance and Lotte Chilsung Beverage, you can compare the effects of market volatilities on Samsung Life and Lotte Chilsung 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 Lotte Chilsung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Lotte Chilsung.
Diversification Opportunities for Samsung Life and Lotte Chilsung
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Lotte is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life Insurance and Lotte Chilsung Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chilsung Beverage 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 Insurance are associated (or correlated) with Lotte Chilsung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chilsung Beverage has no effect on the direction of Samsung Life i.e., Samsung Life and Lotte Chilsung go up and down completely randomly.
Pair Corralation between Samsung Life and Lotte Chilsung
Assuming the 90 days trading horizon Samsung Life Insurance is expected to generate 2.76 times more return on investment than Lotte Chilsung. However, Samsung Life is 2.76 times more volatile than Lotte Chilsung Beverage. It trades about 0.04 of its potential returns per unit of risk. Lotte Chilsung Beverage is currently generating about -0.39 per unit of risk. If you would invest 9,260,000 in Samsung Life Insurance on November 7, 2024 and sell it today you would earn a total of 130,000 from holding Samsung Life Insurance or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 89.47% |
| Values | Daily Returns |
Samsung Life Insurance vs. Lotte Chilsung Beverage
Performance |
| Timeline |
| Samsung Life Insurance |
| Lotte Chilsung Beverage |
Samsung Life and Lotte Chilsung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Lotte Chilsung
The main advantage of trading using opposite Samsung Life and Lotte Chilsung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Lotte Chilsung 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 Lotte Chilsung will offset losses from the drop in Lotte Chilsung's long position.| Samsung Life vs. AptaBio Therapeutics | Samsung Life vs. Daewoo SBI SPAC | Samsung Life vs. Dream Security co | Samsung Life vs. Microfriend |
| Lotte Chilsung vs. FNSTech Co | Lotte Chilsung vs. PNC Technologies co | Lotte Chilsung vs. Mobile Appliance | Lotte Chilsung vs. Mobileleader CoLtd |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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