Correlation Between Samsung Life and Konan Technology
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Konan Technology 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 Konan Technology 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 Konan Technology, you can compare the effects of market volatilities on Samsung Life and Konan Technology 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 Konan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Konan Technology.
Diversification Opportunities for Samsung Life and Konan Technology
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and Konan is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life Insurance and Konan Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konan Technology 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 Konan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konan Technology has no effect on the direction of Samsung Life i.e., Samsung Life and Konan Technology go up and down completely randomly.
Pair Corralation between Samsung Life and Konan Technology
Assuming the 90 days trading horizon Samsung Life Insurance is expected to generate 0.49 times more return on investment than Konan Technology. However, Samsung Life Insurance is 2.04 times less risky than Konan Technology. It trades about 0.05 of its potential returns per unit of risk. Konan Technology is currently generating about -0.02 per unit of risk. If you would invest 6,053,010 in Samsung Life Insurance on November 27, 2024 and sell it today you would earn a total of 3,066,990 from holding Samsung Life Insurance or generate 50.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Life Insurance vs. Konan Technology
Performance |
| Timeline |
| Samsung Life Insurance |
| Konan Technology |
Samsung Life and Konan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Konan Technology
The main advantage of trading using opposite Samsung Life and Konan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Konan Technology 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 Konan Technology will offset losses from the drop in Konan Technology's long position.| Samsung Life vs. Grand Korea Leisure | Samsung Life vs. Alton Sports CoLtd | Samsung Life vs. Young Heung Iron | Samsung Life vs. Polaris Office Corp |
| Konan Technology vs. LB Investment | Konan Technology vs. E Investment Development | Konan Technology vs. DB Financial Investment | Konan Technology vs. Daol Investment Securities |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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