Correlation Between Kisan Telecom and Samsung Life

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

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

Diversification Opportunities for Kisan Telecom and Samsung Life

0.08

Correlation Coefficient

Kisan Telecom  Samsung Life

Significant diversification

The 3 months correlation between Kisan and Samsung is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kisan Telecom 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 Kisan Telecom 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 Kisan Telecom 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 Kisan Telecom i.e., Kisan Telecom and Samsung Life go up and down completely randomly.

Pair Corralation between Kisan Telecom and Samsung Life

Assuming the 90 days trading horizon Kisan Telecom Co is expected to under-perform the Samsung Life. But the stock apears to be less risky and, when comparing its historical volatility, Kisan Telecom Co is 1.34 times less risky than Samsung Life. The stock trades about -0.06 of its potential returns per unit of risk. The Samsung Life Insurance is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  8,850,000  in Samsung Life Insurance on September 30, 2024 and sell it today you would earn a total of  870,000  from holding Samsung Life Insurance or generate 9.83% return on investment over 90 days.

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

Kisan Telecom Co  vs.  Samsung Life Insurance

Kisan Telecom

Risk-Adjusted Performance

0 of 100

Very Weak

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

Samsung Life Insurance

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Life Insurance are ranked lower than 3 (%) 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 Kisan Telecom and Samsung Life

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

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.