Correlation Between INNOX Advanced and Samsung Life
Can any of the company-specific risk be diversified away by investing in both INNOX Advanced 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 INNOX Advanced and Samsung Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INNOX Advanced Materials and Samsung Life, you can compare the effects of market volatilities on INNOX Advanced 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 INNOX Advanced with a short position of Samsung Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNOX Advanced and Samsung Life.
Diversification Opportunities for INNOX Advanced and Samsung Life
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between INNOX and Samsung is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding INNOX Advanced Materials and Samsung Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Life and INNOX Advanced 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 INNOX Advanced Materials 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 INNOX Advanced i.e., INNOX Advanced and Samsung Life go up and down completely randomly.
Pair Corralation between INNOX Advanced and Samsung Life
Assuming the 90 days trading horizon INNOX Advanced Materials is expected to generate 1.15 times more return on investment than Samsung Life. However, INNOX Advanced is 1.15 times more volatile than Samsung Life. It trades about 0.47 of its potential returns per unit of risk. Samsung Life is currently generating about -0.07 per unit of risk. If you would invest 2,065,000 in INNOX Advanced Materials on November 4, 2024 and sell it today you would earn a total of 645,000 from holding INNOX Advanced Materials or generate 31.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INNOX Advanced Materials vs. Samsung Life
Performance |
| Timeline |
| INNOX Advanced Materials |
| Samsung Life |
INNOX Advanced and Samsung Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INNOX Advanced and Samsung Life
The main advantage of trading using opposite INNOX Advanced and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INNOX Advanced 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.| INNOX Advanced vs. SM Entertainment Co | INNOX Advanced vs. DC Media Co | INNOX Advanced vs. JYP Entertainment Corp | INNOX Advanced vs. Shinsegae Engineering Construction |
| Samsung Life vs. Nh Investment And | Samsung Life vs. Coloray International Investment | Samsung Life vs. Stic Investments | Samsung Life vs. E Investment Development |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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