Correlation Between BYON and Samsung Life

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

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

Diversification Opportunities for BYON and Samsung Life

0.61

Correlation Coefficient

BYON  Samsung Life

Poor diversification

The 3 months correlation between BYON and Samsung is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding BYON Co 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 BYON 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 BYON Co 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 BYON i.e., BYON and Samsung Life go up and down completely randomly.

Pair Corralation between BYON and Samsung Life

Assuming the 90 days trading horizon BYON Co is expected to under-perform the Samsung Life. In addition to that, BYON is 3.48 times more volatile than Samsung Life Insurance. It trades about -0.13 of its total potential returns per unit of risk. Samsung Life Insurance is currently generating about -0.07 per unit of volatility. If you would invest  9,851,642  in Samsung Life Insurance on December 24, 2024 and sell it today you would lose (1,231,642) from holding Samsung Life Insurance or give up 12.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	73.68%
Values	Daily Returns

BYON Co  vs.  Samsung Life Insurance

BYON

Risk-Adjusted Performance

Very Weak

Over the last 90 days BYON 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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 BYON and Samsung Life

The main advantage of trading using opposite BYON and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYON 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 BYON Co 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.