Correlation Between Samsung Life and DB Insurance
Can any of the company-specific risk be diversified away by investing in both Samsung Life and DB Insurance 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 DB Insurance 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 DB Insurance Co, you can compare the effects of market volatilities on Samsung Life and DB Insurance 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 DB Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and DB Insurance.
Diversification Opportunities for Samsung Life and DB Insurance
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and 005830 is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life Insurance and DB Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Insurance 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 DB Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Insurance has no effect on the direction of Samsung Life i.e., Samsung Life and DB Insurance go up and down completely randomly.
Pair Corralation between Samsung Life and DB Insurance
Assuming the 90 days trading horizon Samsung Life Insurance is expected to generate 1.03 times more return on investment than DB Insurance. However, Samsung Life is 1.03 times more volatile than DB Insurance Co. It trades about -0.04 of its potential returns per unit of risk. DB Insurance Co is currently generating about -0.09 per unit of risk. If you would invest 9,150,000 in Samsung Life Insurance on November 3, 2024 and sell it today you would lose (240,000) from holding Samsung Life Insurance or give up 2.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Life Insurance vs. DB Insurance Co
Performance |
| Timeline |
| Samsung Life Insurance |
| DB Insurance |
Samsung Life and DB Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and DB Insurance
The main advantage of trading using opposite Samsung Life and DB Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, DB Insurance 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 DB Insurance will offset losses from the drop in DB Insurance's long position.| Samsung Life vs. Seoul Electronics Telecom | Samsung Life vs. Daejoo Electronic Materials | Samsung Life vs. Lotte Data Communication | Samsung Life vs. Mobileleader CoLtd |
| DB Insurance vs. DB Financial Investment | DB Insurance vs. BIT Computer Co | DB Insurance vs. Incar Financial Service | DB Insurance vs. Shinhan Financial Group |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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