Correlation Between Samsung Life and Nasmedia
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Nasmedia 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 Nasmedia 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 Nasmedia Co, you can compare the effects of market volatilities on Samsung Life and Nasmedia 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 Nasmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Nasmedia.
Diversification Opportunities for Samsung Life and Nasmedia
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Nasmedia is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life Insurance and Nasmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasmedia 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 Nasmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasmedia has no effect on the direction of Samsung Life i.e., Samsung Life and Nasmedia go up and down completely randomly.
Pair Corralation between Samsung Life and Nasmedia
Assuming the 90 days trading horizon Samsung Life Insurance is expected to generate 2.01 times more return on investment than Nasmedia. However, Samsung Life is 2.01 times more volatile than Nasmedia Co. It trades about 0.09 of its potential returns per unit of risk. Nasmedia Co is currently generating about -0.17 per unit of risk. If you would invest 10,150,000 in Samsung Life Insurance on September 1, 2024 and sell it today you would earn a total of 560,000 from holding Samsung Life Insurance or generate 5.52% 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. Nasmedia Co
Performance |
| Timeline |
| Samsung Life Insurance |
| Nasmedia |
Samsung Life and Nasmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Nasmedia
The main advantage of trading using opposite Samsung Life and Nasmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Nasmedia 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 Nasmedia will offset losses from the drop in Nasmedia's long position.| Samsung Life vs. Shinil Electronics Co | Samsung Life vs. Daeduck Electronics Co | Samsung Life vs. KyungIn Electronics Co | Samsung Life vs. PLAYWITH |
| Nasmedia vs. Samlip General Foods | Nasmedia vs. Display Tech Co | Nasmedia vs. Iljin Display | Nasmedia vs. FOODWELL Co |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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