Correlation Between Korea Investment and Samsung Life
Can any of the company-specific risk be diversified away by investing in both Korea Investment 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 Korea Investment and Samsung Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Investment Holdings and Samsung Life, you can compare the effects of market volatilities on Korea Investment 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 Korea Investment with a short position of Samsung Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Investment and Samsung Life.
Diversification Opportunities for Korea Investment and Samsung Life
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korea and Samsung is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Korea Investment Holdings and Samsung Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Life and Korea Investment 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 Korea Investment Holdings 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 Korea Investment i.e., Korea Investment and Samsung Life go up and down completely randomly.
Pair Corralation between Korea Investment and Samsung Life
Assuming the 90 days trading horizon Korea Investment Holdings is expected to generate 0.35 times more return on investment than Samsung Life. However, Korea Investment Holdings is 2.9 times less risky than Samsung Life. It trades about 0.34 of its potential returns per unit of risk. Samsung Life is currently generating about 0.05 per unit of risk. If you would invest 5,700,000 in Korea Investment Holdings on November 27, 2024 and sell it today you would earn a total of 420,000 from holding Korea Investment Holdings or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Investment Holdings vs. Samsung Life
Performance |
| Timeline |
| Korea Investment Holdings |
| Samsung Life |
Korea Investment and Samsung Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Investment and Samsung Life
The main advantage of trading using opposite Korea Investment and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Investment 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.| Korea Investment vs. Samyang Foods Co | Korea Investment vs. LB Investment | Korea Investment vs. Foodnamoo | Korea Investment vs. CKH Food Health |
| Samsung Life vs. SCI Information Service | Samsung Life vs. Ssangyong Information Communication | Samsung Life vs. Vissem Electronics Co | Samsung Life vs. ABCO Electronics Co |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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