Correlation Between Samsung Electronics and Biodyne
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Biodyne 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 Electronics and Biodyne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Biodyne Co, you can compare the effects of market volatilities on Samsung Electronics and Biodyne 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 Electronics with a short position of Biodyne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Biodyne.
Diversification Opportunities for Samsung Electronics and Biodyne
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and Biodyne is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Biodyne Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biodyne and Samsung Electronics 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 Electronics Co are associated (or correlated) with Biodyne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biodyne has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Biodyne go up and down completely randomly.
Pair Corralation between Samsung Electronics and Biodyne
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 22.39 times less return on investment than Biodyne. But when comparing it to its historical volatility, Samsung Electronics Co is 2.5 times less risky than Biodyne. It trades about 0.01 of its potential returns per unit of risk. Biodyne Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 571,000 in Biodyne Co on November 27, 2024 and sell it today you would earn a total of 908,000 from holding Biodyne Co or generate 159.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Samsung Electronics Co vs. Biodyne Co
Performance |
| Timeline |
| Samsung Electronics |
| Biodyne |
Samsung Electronics and Biodyne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Biodyne
The main advantage of trading using opposite Samsung Electronics and Biodyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Biodyne 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 Biodyne will offset losses from the drop in Biodyne's long position.| Samsung Electronics vs. GS Retail Co | Samsung Electronics vs. Jb Financial | Samsung Electronics vs. Hana Financial | Samsung Electronics vs. Miwon Chemicals Co |
| Biodyne vs. SK Chemicals Co | Biodyne vs. DoubleU Games Co | Biodyne vs. Mirai Semiconductors Co | Biodyne vs. Kukdong Oil Chemicals |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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