Correlation Between Samsung Biologics and Youl Chon
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and Youl Chon 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 Youl Chon 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 Youl Chon Chemical, you can compare the effects of market volatilities on Samsung Biologics and Youl Chon 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 Youl Chon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and Youl Chon.
Diversification Opportunities for Samsung Biologics and Youl Chon
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Youl is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and Youl Chon Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youl Chon Chemical 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 Youl Chon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youl Chon Chemical has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and Youl Chon go up and down completely randomly.
Pair Corralation between Samsung Biologics and Youl Chon
Assuming the 90 days trading horizon Samsung Biologics Co is expected to generate 0.43 times more return on investment than Youl Chon. However, Samsung Biologics Co is 2.3 times less risky than Youl Chon. It trades about -0.22 of its potential returns per unit of risk. Youl Chon Chemical is currently generating about -0.23 per unit of risk. If you would invest 100,000,000 in Samsung Biologics Co on August 29, 2024 and sell it today you would lose (7,100,000) from holding Samsung Biologics Co or give up 7.1% 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. Youl Chon Chemical
Performance |
| Timeline |
| Samsung Biologics |
| Youl Chon Chemical |
Samsung Biologics and Youl Chon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and Youl Chon
The main advantage of trading using opposite Samsung Biologics and Youl Chon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, Youl Chon 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 Youl Chon will offset losses from the drop in Youl Chon's long position.| Samsung Biologics vs. Youl Chon Chemical | Samsung Biologics vs. CKH Food Health | Samsung Biologics vs. LG Household Healthcare | Samsung Biologics vs. Hannong Chemicals |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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