Correlation Between Neungyule Education and Samsung Life

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

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

Diversification Opportunities for Neungyule Education and Samsung Life

-0.18

Correlation Coefficient

Neungyule Education  Samsung Life

Good diversification

The 3 months correlation between Neungyule and Samsung is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Neungyule Education 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 Neungyule Education 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 Neungyule Education 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 Neungyule Education i.e., Neungyule Education and Samsung Life go up and down completely randomly.

Pair Corralation between Neungyule Education and Samsung Life

Assuming the 90 days trading horizon Neungyule Education is expected to generate 1.39 times more return on investment than Samsung Life. However, Neungyule Education is 1.39 times more volatile than Samsung Life Insurance. It trades about 0.07 of its potential returns per unit of risk. Samsung Life Insurance is currently generating about 0.04 per unit of risk. If you would invest  350,500  in Neungyule Education on September 13, 2024 and sell it today you would earn a total of  36,500  from holding Neungyule Education or generate 10.41% return on investment over 90 days.

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

Neungyule Education  vs.  Samsung Life Insurance

Neungyule Education

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Neungyule Education are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Neungyule Education sustained solid returns over the last few months and may actually be approaching a breakup point.

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 weak basic indicators, Samsung Life may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Neungyule Education and Samsung Life

The main advantage of trading using opposite Neungyule Education and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neungyule Education 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 Neungyule Education 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.