Correlation Between Samsung SDI and Samsung Biologics
Can any of the company-specific risk be diversified away by investing in both Samsung SDI and Samsung Biologics 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 SDI and Samsung Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung SDI and Samsung Biologics Co, you can compare the effects of market volatilities on Samsung SDI and Samsung Biologics 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 SDI with a short position of Samsung Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and Samsung Biologics.
Diversification Opportunities for Samsung SDI and Samsung Biologics
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Samsung is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI and Samsung Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Biologics and Samsung SDI 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 SDI are associated (or correlated) with Samsung Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Biologics has no effect on the direction of Samsung SDI i.e., Samsung SDI and Samsung Biologics go up and down completely randomly.
Pair Corralation between Samsung SDI and Samsung Biologics
Assuming the 90 days trading horizon Samsung SDI is expected to under-perform the Samsung Biologics. In addition to that, Samsung SDI is 3.29 times more volatile than Samsung Biologics Co. It trades about -0.21 of its total potential returns per unit of risk. Samsung Biologics Co is currently generating about -0.26 per unit of volatility. If you would invest 100,000,000 in Samsung Biologics Co on August 25, 2024 and sell it today you would lose (6,600,000) from holding Samsung Biologics Co or give up 6.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung SDI vs. Samsung Biologics Co
Performance |
| Timeline |
| Samsung SDI |
| Samsung Biologics |
Samsung SDI and Samsung Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung SDI and Samsung Biologics
The main advantage of trading using opposite Samsung SDI and Samsung Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, Samsung Biologics 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 Biologics will offset losses from the drop in Samsung Biologics' long position.| Samsung SDI vs. Shinsegae Information Communication | Samsung SDI vs. Korea Information Communications | Samsung SDI vs. Automobile Pc | Samsung SDI vs. Shinil Electronics Co |
| Samsung Biologics vs. InfoBank | Samsung Biologics vs. DataSolution | Samsung Biologics vs. Koryo Credit Information | Samsung Biologics vs. Settlebank |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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