Correlation Between Samsung Asset and Busan Industrial
Can any of the company-specific risk be diversified away by investing in both Samsung Asset and Busan Industrial 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 Samsung Asset and Busan Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Asset Management and Busan Industrial Co, you can compare the effects of market volatilities on Samsung Asset and Busan Industrial 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 Samsung Asset with a short position of Busan Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Asset and Busan Industrial.
Diversification Opportunities for Samsung Asset and Busan Industrial
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Busan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Asset Management and Busan Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Industrial and Samsung Asset 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 Samsung Asset Management are associated (or correlated) with Busan Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Busan Industrial has no effect on the direction of Samsung Asset i.e., Samsung Asset and Busan Industrial go up and down completely randomly.
Pair Corralation between Samsung Asset and Busan Industrial
Assuming the 90 days trading horizon Samsung Asset Management is expected to generate 0.34 times more return on investment than Busan Industrial. However, Samsung Asset Management is 2.93 times less risky than Busan Industrial. It trades about 0.1 of its potential returns per unit of risk. Busan Industrial Co is currently generating about 0.01 per unit of risk. If you would invest 1,263,439 in Samsung Asset Management on September 2, 2024 and sell it today you would earn a total of 374,561 from holding Samsung Asset Management or generate 29.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Asset Management vs. Busan Industrial Co
Performance |
| Timeline |
| Samsung Asset Management |
| Busan Industrial |
Samsung Asset and Busan Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Asset and Busan Industrial
The main advantage of trading using opposite Samsung Asset and Busan Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Asset position performs unexpectedly, Busan Industrial 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 Busan Industrial will offset losses from the drop in Busan Industrial's long position.| Samsung Asset vs. Busan Industrial Co | Samsung Asset vs. Busan Ind | Samsung Asset vs. Mirae Asset Daewoo | Samsung Asset vs. Shinhan WTI Futures |
| Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Daewoo SBI SPAC | Busan Industrial vs. Dream Security co | Busan Industrial vs. Microfriend |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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