Correlation Between Samsung Card and Jb Financial

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

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

Diversification Opportunities for Samsung Card and Jb Financial

-0.63

Correlation Coefficient

Samsung Card  Jb Financial

Excellent diversification

The 3 months correlation between Samsung and 175330 is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Card Co and Jb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jb Financial and Samsung Card 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 Card Co are associated (or correlated) with Jb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jb Financial has no effect on the direction of Samsung Card i.e., Samsung Card and Jb Financial go up and down completely randomly.

Pair Corralation between Samsung Card and Jb Financial

Assuming the 90 days trading horizon Samsung Card Co is expected to under-perform the Jb Financial. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Card Co is 1.38 times less risky than Jb Financial. The stock trades about -0.01 of its potential returns per unit of risk. The Jb Financial is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  1,424,360  in Jb Financial on August 31, 2024 and sell it today you would earn a total of  569,640  from holding Jb Financial or generate 39.99% return on investment over 90 days.

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

Samsung Card Co  vs.  Jb Financial

Samsung Card

Risk-Adjusted Performance

0 of 100

Very Weak

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

Jb Financial

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jb Financial are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jb Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Card and Jb Financial

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

The idea behind Samsung Card Co and Jb Financial 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.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.