Correlation Between Samsung Biologics and Lotte Data
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and Lotte Data 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 Data 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 Data Communication, you can compare the effects of market volatilities on Samsung Biologics and Lotte Data 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 Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and Lotte Data.
Diversification Opportunities for Samsung Biologics and Lotte Data
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Lotte is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and Lotte Data Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Data Communication 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 Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Data Communication has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and Lotte Data go up and down completely randomly.
Pair Corralation between Samsung Biologics and Lotte Data
Assuming the 90 days trading horizon Samsung Biologics is expected to generate 1.58 times less return on investment than Lotte Data. But when comparing it to its historical volatility, Samsung Biologics Co is 1.44 times less risky than Lotte Data. It trades about 0.03 of its potential returns per unit of risk. Lotte Data Communication is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,925,000 in Lotte Data Communication on September 14, 2024 and sell it today you would earn a total of 22,000 from holding Lotte Data Communication or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Biologics Co vs. Lotte Data Communication
Performance |
| Timeline |
| Samsung Biologics |
| Lotte Data Communication |
Samsung Biologics and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and Lotte Data
The main advantage of trading using opposite Samsung Biologics and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, Lotte Data 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 Data will offset losses from the drop in Lotte Data's long position.| Samsung Biologics vs. InnoTherapy | Samsung Biologics vs. Osang Healthcare Co,Ltd | Samsung Biologics vs. Green Cross Medical | Samsung Biologics vs. Clean Science co |
| Lotte Data vs. SK Holdings Co | Lotte Data vs. Solution Advanced Technology | Lotte Data vs. Busan Industrial Co | Lotte Data vs. Busan Ind |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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