Correlation Between Samsung Biologics and RPBio
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and RPBio 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 RPBio 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 RPBio Inc, you can compare the effects of market volatilities on Samsung Biologics and RPBio 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 RPBio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and RPBio.
Diversification Opportunities for Samsung Biologics and RPBio
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and RPBio is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and RPBio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPBio Inc 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 RPBio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RPBio Inc has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and RPBio go up and down completely randomly.
Pair Corralation between Samsung Biologics and RPBio
Assuming the 90 days trading horizon Samsung Biologics Co is expected to generate 0.58 times more return on investment than RPBio. However, Samsung Biologics Co is 1.72 times less risky than RPBio. It trades about 0.02 of its potential returns per unit of risk. RPBio Inc is currently generating about -0.13 per unit of risk. If you would invest 96,100,000 in Samsung Biologics Co on September 3, 2024 and sell it today you would earn a total of 1,400,000 from holding Samsung Biologics Co or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Biologics Co vs. RPBio Inc
Performance |
| Timeline |
| Samsung Biologics |
| RPBio Inc |
Samsung Biologics and RPBio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and RPBio
The main advantage of trading using opposite Samsung Biologics and RPBio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, RPBio 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 RPBio will offset losses from the drop in RPBio'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 |
| RPBio vs. PJ Metal Co | RPBio vs. Wave Electronics Co | RPBio vs. Youngsin Metal Industrial | RPBio vs. Daeduck Electronics 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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