Correlation Between Daihan Pharmaceutical and Sam A
Can any of the company-specific risk be diversified away by investing in both Daihan Pharmaceutical and Sam A 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 Daihan Pharmaceutical and Sam A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daihan Pharmaceutical CoLtd and Sam A Pharm Co, you can compare the effects of market volatilities on Daihan Pharmaceutical and Sam A 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 Daihan Pharmaceutical with a short position of Sam A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daihan Pharmaceutical and Sam A.
Diversification Opportunities for Daihan Pharmaceutical and Sam A
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daihan and Sam is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Daihan Pharmaceutical CoLtd and Sam A Pharm Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam A Pharm and Daihan Pharmaceutical 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 Daihan Pharmaceutical CoLtd are associated (or correlated) with Sam A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam A Pharm has no effect on the direction of Daihan Pharmaceutical i.e., Daihan Pharmaceutical and Sam A go up and down completely randomly.
Pair Corralation between Daihan Pharmaceutical and Sam A
Assuming the 90 days trading horizon Daihan Pharmaceutical CoLtd is expected to generate 0.61 times more return on investment than Sam A. However, Daihan Pharmaceutical CoLtd is 1.65 times less risky than Sam A. It trades about -0.14 of its potential returns per unit of risk. Sam A Pharm Co is currently generating about -0.27 per unit of risk. If you would invest 2,615,000 in Daihan Pharmaceutical CoLtd on November 4, 2024 and sell it today you would lose (45,000) from holding Daihan Pharmaceutical CoLtd or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daihan Pharmaceutical CoLtd vs. Sam A Pharm Co
Performance |
| Timeline |
| Daihan Pharmaceutical |
| Sam A Pharm |
Daihan Pharmaceutical and Sam A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daihan Pharmaceutical and Sam A
The main advantage of trading using opposite Daihan Pharmaceutical and Sam A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daihan Pharmaceutical position performs unexpectedly, Sam A 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 Sam A will offset losses from the drop in Sam A's long position.| Daihan Pharmaceutical vs. Koryo Credit Information | Daihan Pharmaceutical vs. Settlebank | Daihan Pharmaceutical vs. Samsung Life Insurance | Daihan Pharmaceutical vs. Seoul Electronics Telecom |
| Sam A vs. Ecoplastic | Sam A vs. Hanmi Semiconductor Co | Sam A vs. INNOX Advanced Materials | Sam A vs. Union Materials Corp |
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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