Correlation Between Samsung Biologics and LG Energy
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and LG Energy 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 LG Energy 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 LG Energy Solution, you can compare the effects of market volatilities on Samsung Biologics and LG Energy 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 LG Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and LG Energy.
Diversification Opportunities for Samsung Biologics and LG Energy
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and 373220 is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and LG Energy Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Energy Solution 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 LG Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Energy Solution has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and LG Energy go up and down completely randomly.
Pair Corralation between Samsung Biologics and LG Energy
Assuming the 90 days trading horizon Samsung Biologics Co is expected to generate 0.54 times more return on investment than LG Energy. However, Samsung Biologics Co is 1.84 times less risky than LG Energy. It trades about 0.04 of its potential returns per unit of risk. LG Energy Solution is currently generating about -0.02 per unit of risk. If you would invest 80,200,000 in Samsung Biologics Co on August 25, 2024 and sell it today you would earn a total of 13,200,000 from holding Samsung Biologics Co or generate 16.46% 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. LG Energy Solution
Performance |
| Timeline |
| Samsung Biologics |
| LG Energy Solution |
Samsung Biologics and LG Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and LG Energy
The main advantage of trading using opposite Samsung Biologics and LG Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, LG Energy 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 LG Energy will offset losses from the drop in LG Energy's long position.| Samsung Biologics vs. InfoBank | Samsung Biologics vs. DataSolution | Samsung Biologics vs. Koryo Credit Information | Samsung Biologics vs. Settlebank |
| LG Energy vs. Hana Financial | LG Energy vs. Dongbu Insurance Co | LG Energy vs. Jeju Bank | LG Energy vs. Ssangyong Information Communication |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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