Correlation Between Samsung Biologics and Techwing
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and Techwing 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 Techwing 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 Techwing, you can compare the effects of market volatilities on Samsung Biologics and Techwing 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 Techwing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and Techwing.
Diversification Opportunities for Samsung Biologics and Techwing
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Techwing is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and Techwing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techwing 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 Techwing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techwing has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and Techwing go up and down completely randomly.
Pair Corralation between Samsung Biologics and Techwing
Assuming the 90 days trading horizon Samsung Biologics is expected to generate 4.63 times less return on investment than Techwing. But when comparing it to its historical volatility, Samsung Biologics Co is 3.37 times less risky than Techwing. It trades about 0.01 of its potential returns per unit of risk. Techwing is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,365,000 in Techwing on November 6, 2024 and sell it today you would lose (200,000) from holding Techwing or give up 4.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Biologics Co vs. Techwing
Performance |
| Timeline |
| Samsung Biologics |
| Techwing |
Samsung Biologics and Techwing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and Techwing
The main advantage of trading using opposite Samsung Biologics and Techwing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, Techwing 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 Techwing will offset losses from the drop in Techwing's long position.| Samsung Biologics vs. Organic Special Pet | Samsung Biologics vs. Samlip General Foods | Samsung Biologics vs. Samyang Foods Co | Samsung Biologics vs. Songwon Industrial Co |
| Techwing vs. Lotte Chilsung Beverage | Techwing vs. Daechang Steel Co | Techwing vs. Daehan Steel | Techwing vs. ABOV Semiconductor 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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