Correlation Between Sejong Telecom and Samsung Life
Can any of the company-specific risk be diversified away by investing in both Sejong Telecom and Samsung Life 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 Sejong Telecom and Samsung Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sejong Telecom and Samsung Life Insurance, you can compare the effects of market volatilities on Sejong Telecom and Samsung Life 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 Sejong Telecom with a short position of Samsung Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sejong Telecom and Samsung Life.
Diversification Opportunities for Sejong Telecom and Samsung Life
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sejong and Samsung is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sejong Telecom and Samsung Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Life Insurance and Sejong Telecom 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 Sejong Telecom are associated (or correlated) with Samsung Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Life Insurance has no effect on the direction of Sejong Telecom i.e., Sejong Telecom and Samsung Life go up and down completely randomly.
Pair Corralation between Sejong Telecom and Samsung Life
Assuming the 90 days trading horizon Sejong Telecom is expected to under-perform the Samsung Life. But the stock apears to be less risky and, when comparing its historical volatility, Sejong Telecom is 1.93 times less risky than Samsung Life. The stock trades about -0.21 of its potential returns per unit of risk. The Samsung Life Insurance is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 8,460,000 in Samsung Life Insurance on August 25, 2024 and sell it today you would earn a total of 2,190,000 from holding Samsung Life Insurance or generate 25.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sejong Telecom vs. Samsung Life Insurance
Performance |
Timeline |
Sejong Telecom |
Samsung Life Insurance |
Sejong Telecom and Samsung Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sejong Telecom and Samsung Life
The main advantage of trading using opposite Sejong Telecom and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sejong Telecom position performs unexpectedly, Samsung Life 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 Samsung Life will offset losses from the drop in Samsung Life's long position.Sejong Telecom vs. Sam Chun Dang | Sejong Telecom vs. SAMRYOONG CoLtd | Sejong Telecom vs. BYON Co | Sejong Telecom vs. Sangsangin Co |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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