Correlation Between Samsung Biologics and Hotel Shilla
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and Hotel Shilla 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 Hotel Shilla 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 Hotel Shilla Co, you can compare the effects of market volatilities on Samsung Biologics and Hotel Shilla 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 Hotel Shilla. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and Hotel Shilla.
Diversification Opportunities for Samsung Biologics and Hotel Shilla
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Hotel is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and Hotel Shilla Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Shilla 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 Hotel Shilla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Shilla has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and Hotel Shilla go up and down completely randomly.
Pair Corralation between Samsung Biologics and Hotel Shilla
Assuming the 90 days trading horizon Samsung Biologics Co is expected to generate 1.14 times more return on investment than Hotel Shilla. However, Samsung Biologics is 1.14 times more volatile than Hotel Shilla Co. It trades about 0.04 of its potential returns per unit of risk. Hotel Shilla Co is currently generating about -0.11 per unit of risk. If you would invest 80,100,000 in Samsung Biologics Co on October 10, 2024 and sell it today you would earn a total of 19,900,000 from holding Samsung Biologics Co or generate 24.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Biologics Co vs. Hotel Shilla Co
Performance |
| Timeline |
| Samsung Biologics |
| Hotel Shilla |
Samsung Biologics and Hotel Shilla Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and Hotel Shilla
The main advantage of trading using opposite Samsung Biologics and Hotel Shilla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, Hotel Shilla 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 Hotel Shilla will offset losses from the drop in Hotel Shilla's long position.| Samsung Biologics vs. Camus Engineering Construction | Samsung Biologics vs. Sungdo Engineering Construction | Samsung Biologics vs. Hyunwoo Industrial Co | Samsung Biologics vs. PJ Metal Co |
| Hotel Shilla vs. Samsung Electronics Co | Hotel Shilla vs. Samsung Electronics Co | Hotel Shilla vs. LG Energy Solution | Hotel Shilla vs. SK Hynix |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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