Correlation Between Kyung In and Samsung Life

Can any of the company-specific risk be diversified away by investing in both Kyung In 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 Kyung In and Samsung Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kyung In Synthetic Corp and Samsung Life Insurance, you can compare the effects of market volatilities on Kyung In 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 Kyung In with a short position of Samsung Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung In and Samsung Life.

Diversification Opportunities for Kyung In and Samsung Life

-0.31

Correlation Coefficient

Kyung In  Samsung Life

Very good diversification

The 3 months correlation between Kyung and Samsung is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kyung In Synthetic Corp 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 Kyung In 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 Kyung In Synthetic Corp 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 Kyung In i.e., Kyung In and Samsung Life go up and down completely randomly.

Pair Corralation between Kyung In and Samsung Life

Assuming the 90 days trading horizon Kyung In Synthetic Corp is expected to generate 0.54 times more return on investment than Samsung Life. However, Kyung In Synthetic Corp is 1.85 times less risky than Samsung Life. It trades about 0.13 of its potential returns per unit of risk. Samsung Life Insurance is currently generating about -0.07 per unit of risk. If you would invest  272,000  in Kyung In Synthetic Corp on December 25, 2024 and sell it today you would earn a total of  29,500  from holding Kyung In Synthetic Corp or generate 10.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kyung In Synthetic Corp  vs.  Samsung Life Insurance

Kyung In Synthetic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kyung In Synthetic Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kyung In may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Samsung Life Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Samsung Life Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Kyung In and Samsung Life

The main advantage of trading using opposite Kyung In and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung In 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.

The idea behind Kyung In Synthetic Corp and Samsung Life Insurance 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.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.