Correlation Between Samsung Life and Dongwoo Farm
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Dongwoo Farm 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 Dongwoo Farm 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 Dongwoo Farm To, you can compare the effects of market volatilities on Samsung Life and Dongwoo Farm 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 Dongwoo Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Dongwoo Farm.
Diversification Opportunities for Samsung Life and Dongwoo Farm
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Dongwoo is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life Insurance and Dongwoo Farm To in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoo Farm To 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 Dongwoo Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoo Farm To has no effect on the direction of Samsung Life i.e., Samsung Life and Dongwoo Farm go up and down completely randomly.
Pair Corralation between Samsung Life and Dongwoo Farm
Assuming the 90 days trading horizon Samsung Life Insurance is expected to generate 1.46 times more return on investment than Dongwoo Farm. However, Samsung Life is 1.46 times more volatile than Dongwoo Farm To. It trades about 0.04 of its potential returns per unit of risk. Dongwoo Farm To is currently generating about -0.04 per unit of risk. If you would invest 6,434,624 in Samsung Life Insurance on November 5, 2024 and sell it today you would earn a total of 2,475,376 from holding Samsung Life Insurance or generate 38.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Life Insurance vs. Dongwoo Farm To
Performance |
| Timeline |
| Samsung Life Insurance |
| Dongwoo Farm To |
Samsung Life and Dongwoo Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Dongwoo Farm
The main advantage of trading using opposite Samsung Life and Dongwoo Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Dongwoo Farm 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 Dongwoo Farm will offset losses from the drop in Dongwoo Farm's long position.| Samsung Life vs. Samji Electronics Co | Samsung Life vs. Cuckoo Electronics Co | Samsung Life vs. Daishin Information Communications | Samsung Life vs. ABCO Electronics Co |
| Dongwoo Farm vs. Mobile Appliance | Dongwoo Farm vs. Korea Air Svc | Dongwoo Farm vs. Nice Information Telecommunication | Dongwoo Farm vs. Automobile Pc |
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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