Correlation Between Green Cross and Samsung Biologics
Can any of the company-specific risk be diversified away by investing in both Green Cross 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 Green Cross and Samsung Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cross Lab and Samsung Biologics Co, you can compare the effects of market volatilities on Green Cross 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 Green Cross with a short position of Samsung Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cross and Samsung Biologics.
Diversification Opportunities for Green Cross and Samsung Biologics
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Green and Samsung is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Green Cross Lab and Samsung Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Biologics and Green Cross 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 Green Cross Lab 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 Green Cross i.e., Green Cross and Samsung Biologics go up and down completely randomly.
Pair Corralation between Green Cross and Samsung Biologics
Assuming the 90 days trading horizon Green Cross Lab is expected to under-perform the Samsung Biologics. In addition to that, Green Cross is 1.73 times more volatile than Samsung Biologics Co. It trades about -0.04 of its total potential returns per unit of risk. Samsung Biologics Co is currently generating about 0.02 per unit of volatility. If you would invest 83,300,000 in Samsung Biologics Co on August 25, 2024 and sell it today you would earn a total of 10,100,000 from holding Samsung Biologics Co or generate 12.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cross Lab vs. Samsung Biologics Co
Performance |
| Timeline |
| Green Cross Lab |
| Samsung Biologics |
Green Cross and Samsung Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cross and Samsung Biologics
The main advantage of trading using opposite Green Cross and Samsung Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cross 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.| Green Cross vs. Samsung Biologics Co | Green Cross vs. SK Bioscience Co | Green Cross vs. Sk Biopharmaceuticals Co | Green Cross vs. ABL Bio |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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