Correlation Between Samsung Biologics and Samsung SDI
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and Samsung SDI 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 Samsung Biologics and Samsung SDI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Biologics Co and Samsung SDI, you can compare the effects of market volatilities on Samsung Biologics and Samsung SDI 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 Samsung Biologics with a short position of Samsung SDI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and Samsung SDI.
Diversification Opportunities for Samsung Biologics and Samsung SDI
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Samsung is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and Samsung SDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung SDI and Samsung Biologics 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 Samsung Biologics Co are associated (or correlated) with Samsung SDI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung SDI has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and Samsung SDI go up and down completely randomly.
Pair Corralation between Samsung Biologics and Samsung SDI
Assuming the 90 days trading horizon Samsung Biologics Co is expected to generate 0.3 times more return on investment than Samsung SDI. However, Samsung Biologics Co is 3.29 times less risky than Samsung SDI. It trades about -0.26 of its potential returns per unit of risk. Samsung SDI is currently generating about -0.21 per unit of risk. If you would invest 100,000,000 in Samsung Biologics Co on August 25, 2024 and sell it today you would lose (6,600,000) from holding Samsung Biologics Co or give up 6.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Biologics Co vs. Samsung SDI
Performance |
| Timeline |
| Samsung Biologics |
| Samsung SDI |
Samsung Biologics and Samsung SDI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and Samsung SDI
The main advantage of trading using opposite Samsung Biologics and Samsung SDI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, Samsung SDI 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 SDI will offset losses from the drop in Samsung SDI's long position.| Samsung Biologics vs. InfoBank | Samsung Biologics vs. DataSolution | Samsung Biologics vs. Koryo Credit Information | Samsung Biologics vs. Settlebank |
| Samsung SDI vs. Shinsegae Information Communication | Samsung SDI vs. Korea Information Communications | Samsung SDI vs. Automobile Pc | Samsung SDI vs. Shinil Electronics Co |
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 Stocks Directory module to find actively traded stocks across global markets.
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