Correlation Between Samsung Life and Dream Security
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Dream Security 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 Dream Security 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 Dream Security co, you can compare the effects of market volatilities on Samsung Life and Dream Security 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 Dream Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Dream Security.
Diversification Opportunities for Samsung Life and Dream Security
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Dream is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life Insurance and Dream Security co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Security co 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 Dream Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Security co has no effect on the direction of Samsung Life i.e., Samsung Life and Dream Security go up and down completely randomly.
Pair Corralation between Samsung Life and Dream Security
Assuming the 90 days trading horizon Samsung Life is expected to generate 2.84 times less return on investment than Dream Security. But when comparing it to its historical volatility, Samsung Life Insurance is 1.28 times less risky than Dream Security. It trades about 0.09 of its potential returns per unit of risk. Dream Security co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 317,000 in Dream Security co on September 14, 2024 and sell it today you would earn a total of 56,000 from holding Dream Security co or generate 17.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Life Insurance vs. Dream Security co
Performance |
| Timeline |
| Samsung Life Insurance |
| Dream Security co |
Samsung Life and Dream Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Dream Security
The main advantage of trading using opposite Samsung Life and Dream Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Dream Security 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 Dream Security will offset losses from the drop in Dream Security's long position.| Samsung Life vs. Hanjoo Light Metal | Samsung Life vs. Dongil Metal Co | Samsung Life vs. Kbi Metal Co | Samsung Life vs. Shinsegae Information Communication |
| Dream Security vs. Dong A Steel Technology | Dream Security vs. PLAYWITH | Dream Security vs. Koh Young Technology | Dream Security vs. Asiana Airlines |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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