Correlation Between Samsung Life and Dong A
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Dong A 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 Dong A 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 Dong A Steel Technology, you can compare the effects of market volatilities on Samsung Life and Dong A 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 Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Dong A.
Diversification Opportunities for Samsung Life and Dong A
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Samsung and Dong is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life Insurance and Dong A Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A 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 Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Steel has no effect on the direction of Samsung Life i.e., Samsung Life and Dong A go up and down completely randomly.
Pair Corralation between Samsung Life and Dong A
Assuming the 90 days trading horizon Samsung Life Insurance is expected to generate 0.81 times more return on investment than Dong A. However, Samsung Life Insurance is 1.23 times less risky than Dong A. It trades about 0.03 of its potential returns per unit of risk. Dong A Steel Technology is currently generating about 0.0 per unit of risk. If you would invest 8,400,000 in Samsung Life Insurance on November 3, 2024 and sell it today you would earn a total of 510,000 from holding Samsung Life Insurance or generate 6.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Life Insurance vs. Dong A Steel Technology
Performance |
| Timeline |
| Samsung Life Insurance |
| Dong A Steel |
Samsung Life and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Dong A
The main advantage of trading using opposite Samsung Life and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| Samsung Life vs. Innowireless Co | Samsung Life vs. A Tech Solution Co | Samsung Life vs. Lion Chemtech Co | Samsung Life vs. Polaris Office Corp |
| Dong A vs. E Investment Development | Dong A vs. Shinhan Inverse Copper | Dong A vs. Leaders Technology Investment | Dong A vs. SBI Investment KOREA |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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