Correlation Between Ssangyong Information and Samsung Life
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information 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 Ssangyong Information and Samsung Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ssangyong Information Communication and Samsung Life, you can compare the effects of market volatilities on Ssangyong Information 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 Ssangyong Information with a short position of Samsung Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Samsung Life.
Diversification Opportunities for Ssangyong Information and Samsung Life
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ssangyong and Samsung is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Samsung Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Life and Ssangyong Information 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 Ssangyong Information Communication 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 has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Samsung Life go up and down completely randomly.
Pair Corralation between Ssangyong Information and Samsung Life
Assuming the 90 days trading horizon Ssangyong Information is expected to generate 2.11 times less return on investment than Samsung Life. But when comparing it to its historical volatility, Ssangyong Information Communication is 1.62 times less risky than Samsung Life. It trades about 0.05 of its potential returns per unit of risk. Samsung Life is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9,360,000 in Samsung Life on September 25, 2024 and sell it today you would earn a total of 900,000 from holding Samsung Life or generate 9.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.39% |
Values | Daily Returns |
Ssangyong Information Communic vs. Samsung Life
Performance |
Timeline |
Ssangyong Information |
Samsung Life |
Ssangyong Information and Samsung Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ssangyong Information and Samsung Life
The main advantage of trading using opposite Ssangyong Information and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information 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.Ssangyong Information vs. Settlebank | Ssangyong Information vs. Korea Computer Systems | Ssangyong Information vs. SSR Inc |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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