Correlation Between Samsung Biologics and JLK
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and JLK 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 JLK 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 JLK Inc, you can compare the effects of market volatilities on Samsung Biologics and JLK 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 JLK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and JLK.
Diversification Opportunities for Samsung Biologics and JLK
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and JLK is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and JLK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JLK 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 JLK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JLK Inc has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and JLK go up and down completely randomly.
Pair Corralation between Samsung Biologics and JLK
Assuming the 90 days trading horizon Samsung Biologics is expected to generate 3.61 times less return on investment than JLK. But when comparing it to its historical volatility, Samsung Biologics Co is 2.87 times less risky than JLK. It trades about 0.13 of its potential returns per unit of risk. JLK Inc is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 691,000 in JLK Inc on September 16, 2024 and sell it today you would earn a total of 125,000 from holding JLK Inc or generate 18.09% 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. JLK Inc
Performance |
| Timeline |
| Samsung Biologics |
| JLK Inc |
Samsung Biologics and JLK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and JLK
The main advantage of trading using opposite Samsung Biologics and JLK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, JLK 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 JLK will offset losses from the drop in JLK'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 |
| JLK vs. Samsung Electronics Co | JLK vs. Samsung Electronics Co | JLK vs. LG Energy Solution | JLK vs. SK Hynix |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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