Correlation Between Seoul Semiconductor and Samsung Life
Can any of the company-specific risk be diversified away by investing in both Seoul Semiconductor 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 Seoul Semiconductor and Samsung Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoul Semiconductor Co and Samsung Life, you can compare the effects of market volatilities on Seoul Semiconductor 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 Seoul Semiconductor with a short position of Samsung Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Semiconductor and Samsung Life.
Diversification Opportunities for Seoul Semiconductor and Samsung Life
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seoul and Samsung is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Semiconductor Co and Samsung Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Life and Seoul Semiconductor 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 Seoul Semiconductor Co 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 has no effect on the direction of Seoul Semiconductor i.e., Seoul Semiconductor and Samsung Life go up and down completely randomly.
Pair Corralation between Seoul Semiconductor and Samsung Life
Assuming the 90 days trading horizon Seoul Semiconductor Co is expected to under-perform the Samsung Life. In addition to that, Seoul Semiconductor is 1.11 times more volatile than Samsung Life. It trades about -0.07 of its total potential returns per unit of risk. Samsung Life is currently generating about 0.09 per unit of volatility. If you would invest 8,330,000 in Samsung Life on September 14, 2024 and sell it today you would earn a total of 2,060,000 from holding Samsung Life or generate 24.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Semiconductor Co vs. Samsung Life
Performance |
| Timeline |
| Seoul Semiconductor |
| Samsung Life |
Seoul Semiconductor and Samsung Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Semiconductor and Samsung Life
The main advantage of trading using opposite Seoul Semiconductor and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Semiconductor 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.| Seoul Semiconductor vs. Cube Entertainment | Seoul Semiconductor vs. Dreamus Company | Seoul Semiconductor vs. LG Energy Solution | Seoul Semiconductor vs. Dongwon System |
| Samsung Life vs. KB Financial Group | Samsung Life vs. Shinhan Financial Group | Samsung Life vs. Hana Financial | Samsung Life vs. Woori Financial Group |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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