Correlation Between EBEST Investment and Samsung Life
Can any of the company-specific risk be diversified away by investing in both EBEST 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 EBEST 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 EBEST Investment Securities and Samsung Life, you can compare the effects of market volatilities on EBEST 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 EBEST Investment with a short position of Samsung Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Samsung Life.
Diversification Opportunities for EBEST Investment and Samsung Life
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EBEST and Samsung is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Samsung Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Life and EBEST 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 EBEST Investment Securities 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 EBEST Investment i.e., EBEST Investment and Samsung Life go up and down completely randomly.
Pair Corralation between EBEST Investment and Samsung Life
Assuming the 90 days trading horizon EBEST Investment Securities is expected to under-perform the Samsung Life. But the stock apears to be less risky and, when comparing its historical volatility, EBEST Investment Securities is 1.22 times less risky than Samsung Life. The stock trades about 0.0 of its potential returns per unit of risk. The Samsung Life is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 10,450,000 in Samsung Life on September 1, 2024 and sell it today you would earn a total of 260,000 from holding Samsung Life or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. Samsung Life
Performance |
| Timeline |
| EBEST Investment Sec |
| Samsung Life |
EBEST Investment and Samsung Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Samsung Life
The main advantage of trading using opposite EBEST Investment and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST 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.| EBEST Investment vs. DB Financial Investment | EBEST Investment vs. Lindeman Asia Investment | EBEST Investment vs. BGF Retail Co | EBEST Investment vs. Jin Air Co |
| Samsung Life vs. Ilji Technology Co | Samsung Life vs. Daou Technology | Samsung Life vs. Polaris Office Corp | Samsung Life vs. AurosTechnology |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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