Correlation Between Samsung Electronics and Pharma Reaserch
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Pharma Reaserch 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 Pharma Reaserch 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 Pharma Reaserch Prod, you can compare the effects of market volatilities on Samsung Electronics and Pharma Reaserch 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 Pharma Reaserch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Pharma Reaserch.
Diversification Opportunities for Samsung Electronics and Pharma Reaserch
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Pharma is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Pharma Reaserch Prod in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharma Reaserch Prod 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 Pharma Reaserch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharma Reaserch Prod has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Pharma Reaserch go up and down completely randomly.
Pair Corralation between Samsung Electronics and Pharma Reaserch
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Pharma Reaserch. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 2.01 times less risky than Pharma Reaserch. The stock trades about -0.01 of its potential returns per unit of risk. The Pharma Reaserch Prod is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7,682,892 in Pharma Reaserch Prod on October 13, 2024 and sell it today you would earn a total of 17,417,108 from holding Pharma Reaserch Prod or generate 226.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Pharma Reaserch Prod
Performance |
| Timeline |
| Samsung Electronics |
| Pharma Reaserch Prod |
Samsung Electronics and Pharma Reaserch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Pharma Reaserch
The main advantage of trading using opposite Samsung Electronics and Pharma Reaserch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Pharma Reaserch 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 Pharma Reaserch will offset losses from the drop in Pharma Reaserch's long position.| Samsung Electronics vs. Polaris Office Corp | Samsung Electronics vs. Korean Drug Co | Samsung Electronics vs. CU Medical Systems | Samsung Electronics vs. Tae Kyung Chemical |
| Pharma Reaserch vs. Medy Tox | Pharma Reaserch vs. Seegene | Pharma Reaserch vs. ALTEOGEN | Pharma Reaserch vs. ABL Bio |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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