Correlation Between Xavis and Samjin LND
Can any of the company-specific risk be diversified away by investing in both Xavis and Samjin LND 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 Xavis and Samjin LND into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xavis Co and Samjin LND Co, you can compare the effects of market volatilities on Xavis and Samjin LND 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 Xavis with a short position of Samjin LND. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xavis and Samjin LND.
Diversification Opportunities for Xavis and Samjin LND
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xavis and Samjin is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Xavis Co and Samjin LND Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samjin LND and Xavis 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 Xavis Co are associated (or correlated) with Samjin LND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samjin LND has no effect on the direction of Xavis i.e., Xavis and Samjin LND go up and down completely randomly.
Pair Corralation between Xavis and Samjin LND
Assuming the 90 days trading horizon Xavis Co is expected to generate 1.14 times more return on investment than Samjin LND. However, Xavis is 1.14 times more volatile than Samjin LND Co. It trades about -0.1 of its potential returns per unit of risk. Samjin LND Co is currently generating about -0.14 per unit of risk. If you would invest 225,000 in Xavis Co on September 1, 2024 and sell it today you would lose (83,200) from holding Xavis Co or give up 36.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.19% |
| Values | Daily Returns |
Xavis Co vs. Samjin LND Co
Performance |
| Timeline |
| Xavis |
| Samjin LND |
Xavis and Samjin LND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xavis and Samjin LND
The main advantage of trading using opposite Xavis and Samjin LND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xavis position performs unexpectedly, Samjin LND 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 Samjin LND will offset losses from the drop in Samjin LND's long position.The idea behind Xavis Co and Samjin LND Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Samjin LND vs. Samsung Life Insurance | Samjin LND vs. Hankuk Steel Wire | Samjin LND vs. Dongil Steel Co | Samjin LND vs. J Steel 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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