Correlation Between Samsung Life and CHOROKBAEM PANY

Can any of the company-specific risk be diversified away by investing in both Samsung Life and CHOROKBAEM PANY 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 CHOROKBAEM PANY 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 CHOROKBAEM PANY Co, you can compare the effects of market volatilities on Samsung Life and CHOROKBAEM PANY 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 CHOROKBAEM PANY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and CHOROKBAEM PANY.

Diversification Opportunities for Samsung Life and CHOROKBAEM PANY

0.83

Correlation Coefficient

Samsung Life  CHOROKBAEM PANY

Very poor diversification

The 3 months correlation between Samsung and CHOROKBAEM is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life Insurance and CHOROKBAEM PANY Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHOROKBAEM PANY 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 CHOROKBAEM PANY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHOROKBAEM PANY has no effect on the direction of Samsung Life i.e., Samsung Life and CHOROKBAEM PANY go up and down completely randomly.

Pair Corralation between Samsung Life and CHOROKBAEM PANY

Assuming the 90 days trading horizon Samsung Life Insurance is expected to generate 1.36 times more return on investment than CHOROKBAEM PANY. However, Samsung Life is 1.36 times more volatile than CHOROKBAEM PANY Co. It trades about -0.1 of its potential returns per unit of risk. CHOROKBAEM PANY Co is currently generating about -0.24 per unit of risk. If you would invest  10,170,000  in Samsung Life Insurance on October 25, 2024 and sell it today you would lose (1,650,000) from holding Samsung Life Insurance or give up 16.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	75.41%
Values	Daily Returns

Samsung Life Insurance  vs.  CHOROKBAEM PANY Co

Samsung Life Insurance

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

CHOROKBAEM PANY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHOROKBAEM PANY Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Samsung Life and CHOROKBAEM PANY

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

The idea behind Samsung Life Insurance and CHOROKBAEM PANY Co 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.