Correlation Between SillaJen and Samsung Card

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

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

Diversification Opportunities for SillaJen and Samsung Card

-0.03

Correlation Coefficient

SillaJen  Samsung Card

Good diversification

The 3 months correlation between SillaJen and Samsung is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding SillaJen and Samsung Card Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Card and SillaJen 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 SillaJen are associated (or correlated) with Samsung Card. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Card has no effect on the direction of SillaJen i.e., SillaJen and Samsung Card go up and down completely randomly.

Pair Corralation between SillaJen and Samsung Card

Assuming the 90 days trading horizon SillaJen is expected to under-perform the Samsung Card. In addition to that, SillaJen is 1.69 times more volatile than Samsung Card Co. It trades about -0.12 of its total potential returns per unit of risk. Samsung Card Co is currently generating about 0.07 per unit of volatility. If you would invest  4,255,000  in Samsung Card Co on December 1, 2024 and sell it today you would earn a total of  240,000  from holding Samsung Card Co or generate 5.64% return on investment over 90 days.

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

SillaJen  vs.  Samsung Card Co

SillaJen

Risk-Adjusted Performance

Very Weak

Over the last 90 days SillaJen 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 Card

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Card Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samsung Card may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SillaJen and Samsung Card

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

The idea behind SillaJen and Samsung Card Co 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.