Correlation Between Samsung Publishing and Insun Environment

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

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

Diversification Opportunities for Samsung Publishing and Insun Environment

0.18

Correlation Coefficient

Samsung Publishing  Insun Environment

Average diversification

The 3 months correlation between Samsung and Insun is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Publishing Co and Insun Environment New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insun Environment New and Samsung Publishing 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 Publishing Co are associated (or correlated) with Insun Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insun Environment New has no effect on the direction of Samsung Publishing i.e., Samsung Publishing and Insun Environment go up and down completely randomly.

Pair Corralation between Samsung Publishing and Insun Environment

Assuming the 90 days trading horizon Samsung Publishing Co is expected to generate 1.22 times more return on investment than Insun Environment. However, Samsung Publishing is 1.22 times more volatile than Insun Environment New. It trades about -0.01 of its potential returns per unit of risk. Insun Environment New is currently generating about -0.11 per unit of risk. If you would invest  1,523,495  in Samsung Publishing Co on December 24, 2024 and sell it today you would lose (28,495) from holding Samsung Publishing Co or give up 1.87% of portfolio value over 90 days.

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

Samsung Publishing Co  vs.  Insun Environment New

Samsung Publishing

Risk-Adjusted Performance

Very Weak

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

Insun Environment New

Risk-Adjusted Performance

Very Weak

Over the last 90 days Insun Environment New 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 Samsung Publishing and Insun Environment

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

The idea behind Samsung Publishing Co and Insun Environment New 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.