Correlation Between Samsung Life and J Steel
Can any of the company-specific risk be diversified away by investing in both Samsung Life and J Steel 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 J Steel 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 J Steel Co, you can compare the effects of market volatilities on Samsung Life and J Steel 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 J Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and J Steel.
Diversification Opportunities for Samsung Life and J Steel
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and 023440 is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life Insurance and J Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Steel 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 J Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Steel has no effect on the direction of Samsung Life i.e., Samsung Life and J Steel go up and down completely randomly.
Pair Corralation between Samsung Life and J Steel
Assuming the 90 days trading horizon Samsung Life Insurance is expected to generate 0.43 times more return on investment than J Steel. However, Samsung Life Insurance is 2.35 times less risky than J Steel. It trades about 0.06 of its potential returns per unit of risk. J Steel Co is currently generating about 0.0 per unit of risk. If you would invest 6,764,681 in Samsung Life Insurance on September 3, 2024 and sell it today you would earn a total of 3,945,319 from holding Samsung Life Insurance or generate 58.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Life Insurance vs. J Steel Co
Performance |
| Timeline |
| Samsung Life Insurance |
| J Steel |
Samsung Life and J Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and J Steel
The main advantage of trading using opposite Samsung Life and J Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, J Steel 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 J Steel will offset losses from the drop in J Steel's long position.| Samsung Life vs. AptaBio Therapeutics | Samsung Life vs. Daewoo SBI SPAC | Samsung Life vs. Dream Security co | Samsung Life vs. Microfriend |
| J Steel vs. Samsung Electronics Co | J Steel vs. Samsung Electronics Co | J Steel vs. LG Energy Solution | J Steel vs. SK Hynix |
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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