Correlation Between Fine Besteel and Samsung Life
Can any of the company-specific risk be diversified away by investing in both Fine Besteel 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 Fine Besteel and Samsung Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fine Besteel Co and Samsung Life Insurance, you can compare the effects of market volatilities on Fine Besteel 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 Fine Besteel with a short position of Samsung Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and Samsung Life.
Diversification Opportunities for Fine Besteel and Samsung Life
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fine and Samsung is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel Co 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 Fine Besteel 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 Fine Besteel 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 Insurance has no effect on the direction of Fine Besteel i.e., Fine Besteel and Samsung Life go up and down completely randomly.
Pair Corralation between Fine Besteel and Samsung Life
Assuming the 90 days trading horizon Fine Besteel Co is expected to under-perform the Samsung Life. But the stock apears to be less risky and, when comparing its historical volatility, Fine Besteel Co is 1.1 times less risky than Samsung Life. The stock trades about -0.02 of its potential returns per unit of risk. The Samsung Life Insurance is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 10,100,000 in Samsung Life Insurance on September 13, 2024 and sell it today you would earn a total of 50,000 from holding Samsung Life Insurance or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fine Besteel Co vs. Samsung Life Insurance
Performance |
| Timeline |
| Fine Besteel |
| Samsung Life Insurance |
Fine Besteel and Samsung Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Besteel and Samsung Life
The main advantage of trading using opposite Fine Besteel and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel 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.| Fine Besteel vs. Samsung Electronics Co | Fine Besteel vs. Samsung Electronics Co | Fine Besteel vs. SK Hynix | Fine Besteel vs. POSCO Holdings |
| Samsung Life vs. PI Advanced Materials | Samsung Life vs. BooKook Steel Co | Samsung Life vs. Hyosung Advanced Materials | Samsung Life vs. Fine Besteel 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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