Correlation Between Samsung Biologics and OptiPharm
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and OptiPharm 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 OptiPharm 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 OptiPharm Co, you can compare the effects of market volatilities on Samsung Biologics and OptiPharm 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 OptiPharm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and OptiPharm.
Diversification Opportunities for Samsung Biologics and OptiPharm
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and OptiPharm is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and OptiPharm Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiPharm 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 OptiPharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiPharm has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and OptiPharm go up and down completely randomly.
Pair Corralation between Samsung Biologics and OptiPharm
Assuming the 90 days trading horizon Samsung Biologics Co is expected to generate 1.03 times more return on investment than OptiPharm. However, Samsung Biologics is 1.03 times more volatile than OptiPharm Co. It trades about -0.08 of its potential returns per unit of risk. OptiPharm Co is currently generating about -0.18 per unit of risk. If you would invest 100,000,000 in Samsung Biologics Co on September 13, 2024 and sell it today you would lose (5,100,000) from holding Samsung Biologics Co or give up 5.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Samsung Biologics Co vs. OptiPharm Co
Performance |
| Timeline |
| Samsung Biologics |
| OptiPharm |
Samsung Biologics and OptiPharm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and OptiPharm
The main advantage of trading using opposite Samsung Biologics and OptiPharm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, OptiPharm 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 OptiPharm will offset losses from the drop in OptiPharm's long position.| Samsung Biologics vs. Lotte Data Communication | Samsung Biologics vs. Daishin Information Communications | Samsung Biologics vs. NICE Information Service | Samsung Biologics vs. Moadata Co |
| OptiPharm vs. Automobile Pc | OptiPharm vs. Genie Music | OptiPharm vs. CKH Food Health | OptiPharm vs. Shinsegae Food |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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