Correlation Between Samsung Biologics and Lotte Rental
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and Lotte Rental 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 Lotte Rental 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 Lotte Rental Co, you can compare the effects of market volatilities on Samsung Biologics and Lotte Rental 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 Lotte Rental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and Lotte Rental.
Diversification Opportunities for Samsung Biologics and Lotte Rental
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Lotte is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and Lotte Rental Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Rental 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 Lotte Rental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Rental has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and Lotte Rental go up and down completely randomly.
Pair Corralation between Samsung Biologics and Lotte Rental
Assuming the 90 days trading horizon Samsung Biologics Co is expected to generate 0.83 times more return on investment than Lotte Rental. However, Samsung Biologics Co is 1.2 times less risky than Lotte Rental. It trades about 0.32 of its potential returns per unit of risk. Lotte Rental Co is currently generating about -0.26 per unit of risk. If you would invest 93,400,000 in Samsung Biologics Co on October 28, 2024 and sell it today you would earn a total of 6,600,000 from holding Samsung Biologics Co or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Biologics Co vs. Lotte Rental Co
Performance |
| Timeline |
| Samsung Biologics |
| Lotte Rental |
Samsung Biologics and Lotte Rental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and Lotte Rental
The main advantage of trading using opposite Samsung Biologics and Lotte Rental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, Lotte Rental 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 Lotte Rental will offset losses from the drop in Lotte Rental's long position.| Samsung Biologics vs. Ssangyong Information Communication | Samsung Biologics vs. ITM Semiconductor Co | Samsung Biologics vs. Clean Science co | Samsung Biologics vs. Digital Power Communications |
| Lotte Rental vs. Nh Investment And | Lotte Rental vs. KTB Investment Securities | Lotte Rental vs. E Investment Development | Lotte Rental vs. Daol Investment Securities |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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