Correlation Between Samsung Publishing and Settlebank

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

Diversification Opportunities for Samsung Publishing and Settlebank

0.06
  Correlation Coefficient

Significant diversification

The 3 months correlation between Samsung and Settlebank is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Publishing Co and Settlebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Settlebank 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 Settlebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Settlebank has no effect on the direction of Samsung Publishing i.e., Samsung Publishing and Settlebank go up and down completely randomly.

Pair Corralation between Samsung Publishing and Settlebank

Assuming the 90 days trading horizon Samsung Publishing Co is expected to generate 1.3 times more return on investment than Settlebank. However, Samsung Publishing is 1.3 times more volatile than Settlebank. It trades about 0.02 of its potential returns per unit of risk. Settlebank is currently generating about -0.06 per unit of risk. If you would invest  1,466,266  in Samsung Publishing Co on October 3, 2024 and sell it today you would earn a total of  14,734  from holding Samsung Publishing Co or generate 1.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Samsung Publishing Co  vs.  Settlebank

 Performance 
       Timeline  
Samsung Publishing 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Publishing Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.
Settlebank 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Settlebank 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.

Samsung Publishing and Settlebank Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Samsung Publishing and Settlebank

The main advantage of trading using opposite Samsung Publishing and Settlebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Publishing position performs unexpectedly, Settlebank 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 Settlebank will offset losses from the drop in Settlebank's long position.
The idea behind Samsung Publishing Co and Settlebank 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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