Correlation Between Samsung Biologics and PanGen Biotech
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and PanGen Biotech 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 PanGen Biotech 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 PanGen Biotech, you can compare the effects of market volatilities on Samsung Biologics and PanGen Biotech 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 PanGen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and PanGen Biotech.
Diversification Opportunities for Samsung Biologics and PanGen Biotech
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and PanGen is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and PanGen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PanGen Biotech 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 PanGen Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PanGen Biotech has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and PanGen Biotech go up and down completely randomly.
Pair Corralation between Samsung Biologics and PanGen Biotech
Assuming the 90 days trading horizon Samsung Biologics Co is expected to under-perform the PanGen Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Biologics Co is 3.98 times less risky than PanGen Biotech. The stock trades about -0.13 of its potential returns per unit of risk. The PanGen Biotech is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 490,000 in PanGen Biotech on August 30, 2024 and sell it today you would earn a total of 110,000 from holding PanGen Biotech or generate 22.45% 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. PanGen Biotech
Performance |
| Timeline |
| Samsung Biologics |
| PanGen Biotech |
Samsung Biologics and PanGen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and PanGen Biotech
The main advantage of trading using opposite Samsung Biologics and PanGen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, PanGen Biotech 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 PanGen Biotech will offset losses from the drop in PanGen Biotech's long position.| Samsung Biologics vs. Youl Chon Chemical | Samsung Biologics vs. CKH Food Health | Samsung Biologics vs. LG Household Healthcare | Samsung Biologics vs. Hannong Chemicals |
| PanGen Biotech vs. Youngchang Chemical Co | PanGen Biotech vs. Hyundai Home Shopping | PanGen Biotech vs. Namhae Chemical | PanGen Biotech vs. Cuckoo Homesys 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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