Correlation Between Samsung Biologics and LS Materials
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and LS Materials 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 LS Materials 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 LS Materials, you can compare the effects of market volatilities on Samsung Biologics and LS Materials 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 LS Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and LS Materials.
Diversification Opportunities for Samsung Biologics and LS Materials
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and 417200 is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and LS Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LS Materials 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 LS Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LS Materials has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and LS Materials go up and down completely randomly.
Pair Corralation between Samsung Biologics and LS Materials
Assuming the 90 days trading horizon Samsung Biologics is expected to generate 5.56 times less return on investment than LS Materials. But when comparing it to its historical volatility, Samsung Biologics Co is 4.28 times less risky than LS Materials. It trades about 0.24 of its potential returns per unit of risk. LS Materials is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,124,000 in LS Materials on October 24, 2024 and sell it today you would earn a total of 357,000 from holding LS Materials or generate 31.76% 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. LS Materials
Performance |
| Timeline |
| Samsung Biologics |
| LS Materials |
Samsung Biologics and LS Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and LS Materials
The main advantage of trading using opposite Samsung Biologics and LS Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, LS Materials 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 LS Materials will offset losses from the drop in LS Materials' long position.| Samsung Biologics vs. Hyunwoo Industrial Co | Samsung Biologics vs. PJ Electronics Co | Samsung Biologics vs. Seoul Electronics Telecom | Samsung Biologics vs. Duksan Hi Metal |
| LS Materials vs. Samsung Electronics Co | LS Materials vs. Samsung Electronics Co | LS Materials vs. LG Energy Solution | LS Materials 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |