Correlation Between Samsung Life and Youngsin Metal

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

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

Diversification Opportunities for Samsung Life and Youngsin Metal

-0.43

Correlation Coefficient

Samsung Life  Youngsin Metal

Very good diversification

The 3 months correlation between Samsung and Youngsin is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life Insurance and Youngsin Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngsin Metal Industrial and Samsung Life 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 Life Insurance are associated (or correlated) with Youngsin Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngsin Metal Industrial has no effect on the direction of Samsung Life i.e., Samsung Life and Youngsin Metal go up and down completely randomly.

Pair Corralation between Samsung Life and Youngsin Metal

Assuming the 90 days trading horizon Samsung Life Insurance is expected to generate 1.33 times more return on investment than Youngsin Metal. However, Samsung Life is 1.33 times more volatile than Youngsin Metal Industrial. It trades about 0.07 of its potential returns per unit of risk. Youngsin Metal Industrial is currently generating about -0.02 per unit of risk. If you would invest  6,550,000  in Samsung Life Insurance on October 1, 2024 and sell it today you would earn a total of  3,170,000  from holding Samsung Life Insurance or generate 48.4% return on investment over 90 days.

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

Samsung Life Insurance  vs.  Youngsin Metal Industrial

Samsung Life Insurance

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Life Insurance are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samsung Life may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Youngsin Metal Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Youngsin Metal Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Youngsin Metal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Samsung Life and Youngsin Metal

The main advantage of trading using opposite Samsung Life and Youngsin Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Youngsin Metal 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 Youngsin Metal will offset losses from the drop in Youngsin Metal's long position.

The idea behind Samsung Life Insurance and Youngsin Metal Industrial 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 Stocks Directory module to find actively traded stocks across global markets.