Correlation Between Samsung Biologics and ED
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and ED 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 ED 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 ED Co, you can compare the effects of market volatilities on Samsung Biologics and ED 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 ED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and ED.
Diversification Opportunities for Samsung Biologics and ED
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and ED is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and ED Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ED Co 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 ED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ED Co has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and ED go up and down completely randomly.
Pair Corralation between Samsung Biologics and ED
Assuming the 90 days trading horizon Samsung Biologics Co is expected to generate 0.41 times more return on investment than ED. However, Samsung Biologics Co is 2.44 times less risky than ED. It trades about 0.01 of its potential returns per unit of risk. ED Co is currently generating about -0.32 per unit of risk. If you would invest 100,000,000 in Samsung Biologics Co on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Samsung Biologics Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Biologics Co vs. ED Co
Performance |
| Timeline |
| Samsung Biologics |
| ED Co |
Samsung Biologics and ED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and ED
The main advantage of trading using opposite Samsung Biologics and ED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, ED 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 ED will offset losses from the drop in ED's long position.| Samsung Biologics vs. SK Bioscience Co | Samsung Biologics vs. Sk Biopharmaceuticals Co | Samsung Biologics vs. ABL Bio | Samsung Biologics vs. Green Cross Lab |
| ED vs. Hankukpackage Co | ED vs. Sempio Foods Co | ED vs. Nice Information Telecommunication | ED vs. LG Chemicals |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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