Correlation Between Samsung Life and Sungchang Autotech
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Sungchang Autotech 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 Sungchang Autotech 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 Sungchang Autotech Co, you can compare the effects of market volatilities on Samsung Life and Sungchang Autotech 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 Sungchang Autotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Sungchang Autotech.
Diversification Opportunities for Samsung Life and Sungchang Autotech
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Samsung and Sungchang is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life Insurance and Sungchang Autotech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungchang Autotech 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 Sungchang Autotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungchang Autotech has no effect on the direction of Samsung Life i.e., Samsung Life and Sungchang Autotech go up and down completely randomly.
Pair Corralation between Samsung Life and Sungchang Autotech
Assuming the 90 days trading horizon Samsung Life is expected to generate 1.51 times less return on investment than Sungchang Autotech. In addition to that, Samsung Life is 1.78 times more volatile than Sungchang Autotech Co. It trades about 0.05 of its total potential returns per unit of risk. Sungchang Autotech Co is currently generating about 0.15 per unit of volatility. If you would invest 352,000 in Sungchang Autotech Co on November 27, 2024 and sell it today you would earn a total of 17,000 from holding Sungchang Autotech Co or generate 4.83% 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. Sungchang Autotech Co
Performance |
| Timeline |
| Samsung Life Insurance |
| Sungchang Autotech |
Samsung Life and Sungchang Autotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Sungchang Autotech
The main advantage of trading using opposite Samsung Life and Sungchang Autotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Sungchang Autotech 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 Sungchang Autotech will offset losses from the drop in Sungchang Autotech's long position.| Samsung Life vs. Grand Korea Leisure | Samsung Life vs. Alton Sports CoLtd | Samsung Life vs. Young Heung Iron | Samsung Life vs. Polaris Office Corp |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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