Correlation Between Stic Investments and Samsung Life

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

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

Diversification Opportunities for Stic Investments and Samsung Life

-0.11

Correlation Coefficient

Stic Investments  Samsung Life

Good diversification

The 3 months correlation between Stic and Samsung is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and Samsung Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Life and Stic Investments 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 Stic Investments 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 Stic Investments i.e., Stic Investments and Samsung Life go up and down completely randomly.

Pair Corralation between Stic Investments and Samsung Life

Assuming the 90 days trading horizon Stic Investments is expected to generate 0.94 times more return on investment than Samsung Life. However, Stic Investments is 1.06 times less risky than Samsung Life. It trades about 0.0 of its potential returns per unit of risk. Samsung Life is currently generating about -0.02 per unit of risk. If you would invest  888,000  in Stic Investments on October 3, 2024 and sell it today you would lose (25,000) from holding Stic Investments or give up 2.82% of portfolio value over 90 days.

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

Stic Investments  vs.  Samsung Life

Stic Investments

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stic Investments are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Stic Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Samsung Life

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Life are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Samsung Life is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Stic Investments and Samsung Life

The main advantage of trading using opposite Stic Investments and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments 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 Stic Investments and Samsung Life 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.