Correlation Between HMM and Samsung Biologics
Can any of the company-specific risk be diversified away by investing in both HMM 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 HMM and Samsung Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMM Co and Samsung Biologics Co, you can compare the effects of market volatilities on HMM 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 HMM with a short position of Samsung Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMM and Samsung Biologics.
Diversification Opportunities for HMM and Samsung Biologics
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HMM and Samsung is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding HMM Co and Samsung Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Biologics and HMM 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 HMM Co 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 HMM i.e., HMM and Samsung Biologics go up and down completely randomly.
Pair Corralation between HMM and Samsung Biologics
Assuming the 90 days trading horizon HMM is expected to generate 1.2 times less return on investment than Samsung Biologics. In addition to that, HMM is 1.94 times more volatile than Samsung Biologics Co. It trades about 0.02 of its total potential returns per unit of risk. Samsung Biologics Co is currently generating about 0.05 per unit of volatility. If you would invest 77,800,000 in Samsung Biologics Co on September 12, 2024 and sell it today you would earn a total of 18,100,000 from holding Samsung Biologics Co or generate 23.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HMM Co vs. Samsung Biologics Co
Performance |
| Timeline |
| HMM Co |
| Samsung Biologics |
HMM and Samsung Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMM and Samsung Biologics
The main advantage of trading using opposite HMM and Samsung Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMM 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.| HMM vs. Korea New Network | HMM vs. Solution Advanced Technology | HMM vs. Busan Industrial Co | HMM vs. Busan Ind |
| Samsung Biologics vs. SK Bioscience Co | Samsung Biologics vs. Sk Biopharmaceuticals Co | Samsung Biologics vs. ABL Bio | Samsung Biologics vs. Green Cross Lab |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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