Correlation Between Air Busan and Samsung Life
Can any of the company-specific risk be diversified away by investing in both Air Busan 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 Air Busan and Samsung Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Busan Co and Samsung Life, you can compare the effects of market volatilities on Air Busan 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 Air Busan with a short position of Samsung Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Busan and Samsung Life.
Diversification Opportunities for Air Busan and Samsung Life
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Air and Samsung is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Air Busan Co and Samsung Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Life and Air Busan 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 Air Busan 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 has no effect on the direction of Air Busan i.e., Air Busan and Samsung Life go up and down completely randomly.
Pair Corralation between Air Busan and Samsung Life
Assuming the 90 days trading horizon Air Busan Co is expected to generate 0.56 times more return on investment than Samsung Life. However, Air Busan Co is 1.78 times less risky than Samsung Life. It trades about 0.18 of its potential returns per unit of risk. Samsung Life is currently generating about -0.06 per unit of risk. If you would invest 228,000 in Air Busan Co on November 5, 2024 and sell it today you would earn a total of 11,500 from holding Air Busan Co or generate 5.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Busan Co vs. Samsung Life
Performance |
| Timeline |
| Air Busan |
| Samsung Life |
Air Busan and Samsung Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Busan and Samsung Life
The main advantage of trading using opposite Air Busan and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Busan 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.| Air Busan vs. Dongwoo Farm To | Air Busan vs. Nam Hwa Construction | Air Busan vs. Hana Financial | Air Busan vs. ENERGYMACHINERY KOREA CoLtd |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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