Correlation Between Samsung Biologics and PC Direct
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and PC Direct 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 PC Direct 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 PC Direct, you can compare the effects of market volatilities on Samsung Biologics and PC Direct 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 PC Direct. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and PC Direct.
Diversification Opportunities for Samsung Biologics and PC Direct
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and 051380 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and PC Direct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PC Direct 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 PC Direct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PC Direct has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and PC Direct go up and down completely randomly.
Pair Corralation between Samsung Biologics and PC Direct
Assuming the 90 days trading horizon Samsung Biologics is expected to generate 1.6 times less return on investment than PC Direct. But when comparing it to its historical volatility, Samsung Biologics Co is 2.81 times less risky than PC Direct. It trades about 0.07 of its potential returns per unit of risk. PC Direct is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 235,220 in PC Direct on November 3, 2024 and sell it today you would earn a total of 26,780 from holding PC Direct or generate 11.39% 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. PC Direct
Performance |
| Timeline |
| Samsung Biologics |
| PC Direct |
Samsung Biologics and PC Direct Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and PC Direct
The main advantage of trading using opposite Samsung Biologics and PC Direct positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, PC Direct 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 PC Direct will offset losses from the drop in PC Direct's long position.| Samsung Biologics vs. A Tech Solution Co | Samsung Biologics vs. CG Hi Tech | Samsung Biologics vs. LG Display Co | Samsung Biologics vs. Nable Communications |
| PC Direct vs. KTB Investment Securities | PC Direct vs. AeroSpace Technology of | PC Direct vs. Hanjin Transportation Co | PC Direct vs. LG Household Healthcare |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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