Correlation Between Samsung Life and CBI
Can any of the company-specific risk be diversified away by investing in both Samsung Life and CBI 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 CBI 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 CBI Co, you can compare the effects of market volatilities on Samsung Life and CBI 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 CBI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and CBI.
Diversification Opportunities for Samsung Life and CBI
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and CBI is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life Insurance and CBI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBI Co 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 CBI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBI Co has no effect on the direction of Samsung Life i.e., Samsung Life and CBI go up and down completely randomly.
Pair Corralation between Samsung Life and CBI
Assuming the 90 days trading horizon Samsung Life Insurance is expected to generate 0.96 times more return on investment than CBI. However, Samsung Life Insurance is 1.04 times less risky than CBI. It trades about -0.02 of its potential returns per unit of risk. CBI Co is currently generating about -0.28 per unit of risk. If you would invest 10,340,000 in Samsung Life Insurance on September 12, 2024 and sell it today you would lose (290,000) from holding Samsung Life Insurance or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Life Insurance vs. CBI Co
Performance |
| Timeline |
| Samsung Life Insurance |
| CBI Co |
Samsung Life and CBI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and CBI
The main advantage of trading using opposite Samsung Life and CBI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, CBI 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 CBI will offset losses from the drop in CBI's long position.| Samsung Life vs. PI Advanced Materials | Samsung Life vs. Jeong Moon Information | Samsung Life vs. InnoTherapy | Samsung Life vs. Hana Materials |
| CBI vs. Hanshin Construction Co | CBI vs. Dongwoo Farm To | CBI vs. Samsung Life Insurance | CBI vs. Shinsegae Engineering Construction |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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