Correlation Between Korea Computer and Samsung Biologics
Can any of the company-specific risk be diversified away by investing in both Korea Computer 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 Korea Computer and Samsung Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Computer and Samsung Biologics Co, you can compare the effects of market volatilities on Korea Computer 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 Korea Computer with a short position of Samsung Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Computer and Samsung Biologics.
Diversification Opportunities for Korea Computer and Samsung Biologics
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Samsung is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Korea Computer and Samsung Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Biologics and Korea Computer 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 Korea Computer 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 Korea Computer i.e., Korea Computer and Samsung Biologics go up and down completely randomly.
Pair Corralation between Korea Computer and Samsung Biologics
Assuming the 90 days trading horizon Korea Computer is expected to generate 2.61 times more return on investment than Samsung Biologics. However, Korea Computer is 2.61 times more volatile than Samsung Biologics Co. It trades about 0.2 of its potential returns per unit of risk. Samsung Biologics Co is currently generating about -0.25 per unit of risk. If you would invest 480,500 in Korea Computer on August 25, 2024 and sell it today you would earn a total of 64,500 from holding Korea Computer or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Computer vs. Samsung Biologics Co
Performance |
| Timeline |
| Korea Computer |
| Samsung Biologics |
Korea Computer and Samsung Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Computer and Samsung Biologics
The main advantage of trading using opposite Korea Computer and Samsung Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Computer 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.| Korea Computer vs. NICE Information Service | Korea Computer vs. Duksan Hi Metal | Korea Computer vs. Daishin Information Communications | Korea Computer vs. Youngsin Metal Industrial |
| Samsung Biologics vs. Shinsegae Information Communication | Samsung Biologics vs. Digital Power Communications | Samsung Biologics vs. Korea Computer | Samsung Biologics vs. Lotte Data Communication |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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