Correlation Between Samsung Life and PlayD
Can any of the company-specific risk be diversified away by investing in both Samsung Life and PlayD 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 PlayD 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 PlayD Co, you can compare the effects of market volatilities on Samsung Life and PlayD 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 PlayD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and PlayD.
Diversification Opportunities for Samsung Life and PlayD
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and PlayD is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life Insurance and PlayD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayD 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 PlayD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayD has no effect on the direction of Samsung Life i.e., Samsung Life and PlayD go up and down completely randomly.
Pair Corralation between Samsung Life and PlayD
Assuming the 90 days trading horizon Samsung Life is expected to generate 1.32 times less return on investment than PlayD. But when comparing it to its historical volatility, Samsung Life Insurance is 1.75 times less risky than PlayD. It trades about 0.07 of its potential returns per unit of risk. PlayD Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 536,000 in PlayD Co on August 29, 2024 and sell it today you would earn a total of 49,000 from holding PlayD Co or generate 9.14% 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. PlayD Co
Performance |
| Timeline |
| Samsung Life Insurance |
| PlayD |
Samsung Life and PlayD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and PlayD
The main advantage of trading using opposite Samsung Life and PlayD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, PlayD 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 PlayD will offset losses from the drop in PlayD's long position.| Samsung Life vs. AptaBio Therapeutics | Samsung Life vs. Daewoo SBI SPAC | Samsung Life vs. Dream Security co | Samsung Life vs. Microfriend |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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