Correlation Between Samsung Life and Jb Financial
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Jb Financial 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 Jb Financial 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 Jb Financial, you can compare the effects of market volatilities on Samsung Life and Jb Financial 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 Jb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Jb Financial.
Diversification Opportunities for Samsung Life and Jb Financial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Samsung and 175330 is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life Insurance and Jb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jb Financial 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 Jb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jb Financial has no effect on the direction of Samsung Life i.e., Samsung Life and Jb Financial go up and down completely randomly.
Pair Corralation between Samsung Life and Jb Financial
Assuming the 90 days trading horizon Samsung Life Insurance is expected to under-perform the Jb Financial. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Life Insurance is 1.17 times less risky than Jb Financial. The stock trades about -0.48 of its potential returns per unit of risk. The Jb Financial is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 1,628,000 in Jb Financial on October 30, 2024 and sell it today you would earn a total of 309,000 from holding Jb Financial or generate 18.98% 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. Jb Financial
Performance |
| Timeline |
| Samsung Life Insurance |
| Jb Financial |
Samsung Life and Jb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Jb Financial
The main advantage of trading using opposite Samsung Life and Jb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Jb Financial 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 Jb Financial will offset losses from the drop in Jb Financial's long position.| Samsung Life vs. Youngchang Chemical Co | Samsung Life vs. Tae Kyung Chemical | Samsung Life vs. DB Insurance Co | Samsung Life vs. Dgb Financial |
| Jb Financial vs. Dongbu Insurance Co | Jb Financial vs. Shinhan Financial Group | Jb Financial vs. Cloud Air CoLtd | Jb Financial vs. Dgb Financial |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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