Correlation Between Sam-A Pharm and Kolon Life
Can any of the company-specific risk be diversified away by investing in both Sam-A Pharm and Kolon 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 Sam-A Pharm and Kolon Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sam A Pharm Co and Kolon Life Science, you can compare the effects of market volatilities on Sam-A Pharm and Kolon 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 Sam-A Pharm with a short position of Kolon Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam-A Pharm and Kolon Life.
Diversification Opportunities for Sam-A Pharm and Kolon Life
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sam-A and Kolon is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sam A Pharm Co and Kolon Life Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kolon Life Science and Sam-A Pharm 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 Sam A Pharm Co are associated (or correlated) with Kolon Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kolon Life Science has no effect on the direction of Sam-A Pharm i.e., Sam-A Pharm and Kolon Life go up and down completely randomly.
Pair Corralation between Sam-A Pharm and Kolon Life
Assuming the 90 days trading horizon Sam A Pharm Co is expected to generate 1.08 times more return on investment than Kolon Life. However, Sam-A Pharm is 1.08 times more volatile than Kolon Life Science. It trades about 0.02 of its potential returns per unit of risk. Kolon Life Science is currently generating about -0.02 per unit of risk. If you would invest 1,577,052 in Sam A Pharm Co on September 12, 2024 and sell it today you would earn a total of 82,948 from holding Sam A Pharm Co or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sam A Pharm Co vs. Kolon Life Science
Performance |
| Timeline |
| Sam A Pharm |
| Kolon Life Science |
Sam-A Pharm and Kolon Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam-A Pharm and Kolon Life
The main advantage of trading using opposite Sam-A Pharm and Kolon Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam-A Pharm position performs unexpectedly, Kolon 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 Kolon Life will offset losses from the drop in Kolon Life's long position.| Sam-A Pharm vs. Kolon Life Science | Sam-A Pharm vs. JETEMA Co | Sam-A Pharm vs. Aminologics CoLtd | Sam-A Pharm vs. Daihan Pharmaceutical CoLtd |
| Kolon Life vs. Seoul Electronics Telecom | Kolon Life vs. Korea Information Communications | Kolon Life vs. Han Kook Steel | Kolon Life vs. Hankuk Steel Wire |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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