Correlation Between DataSolution and Samsung Biologics
Can any of the company-specific risk be diversified away by investing in both DataSolution and Samsung Biologics 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 DataSolution and Samsung Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DataSolution and Samsung Biologics Co, you can compare the effects of market volatilities on DataSolution and Samsung Biologics 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 DataSolution with a short position of Samsung Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of DataSolution and Samsung Biologics.
Diversification Opportunities for DataSolution and Samsung Biologics
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DataSolution and Samsung is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding DataSolution and Samsung Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Biologics and DataSolution 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 DataSolution are associated (or correlated) with Samsung Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Biologics has no effect on the direction of DataSolution i.e., DataSolution and Samsung Biologics go up and down completely randomly.
Pair Corralation between DataSolution and Samsung Biologics
Assuming the 90 days trading horizon DataSolution is expected to generate 2.52 times more return on investment than Samsung Biologics. However, DataSolution is 2.52 times more volatile than Samsung Biologics Co. It trades about 0.2 of its potential returns per unit of risk. Samsung Biologics Co is currently generating about -0.14 per unit of risk. If you would invest 433,500 in DataSolution on August 28, 2024 and sell it today you would earn a total of 60,500 from holding DataSolution or generate 13.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DataSolution vs. Samsung Biologics Co
Performance |
| Timeline |
| DataSolution |
| Samsung Biologics |
DataSolution and Samsung Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DataSolution and Samsung Biologics
The main advantage of trading using opposite DataSolution and Samsung Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DataSolution position performs unexpectedly, Samsung Biologics 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 Samsung Biologics will offset losses from the drop in Samsung Biologics' long position.| DataSolution vs. Samsung Electronics Co | DataSolution vs. Samsung Electronics Co | DataSolution vs. LG Energy Solution | DataSolution vs. SK Hynix |
| Samsung Biologics vs. Hanjin Transportation Co | Samsung Biologics vs. Daekyung Machinery Engineering | Samsung Biologics vs. Hana Technology Co | Samsung Biologics vs. Alton Sports CoLtd |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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