Correlation Between SK Bioscience and Samsung Life
Can any of the company-specific risk be diversified away by investing in both SK Bioscience and Samsung Life 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 SK Bioscience and Samsung Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Bioscience Co and Samsung Life, you can compare the effects of market volatilities on SK Bioscience and Samsung Life 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 SK Bioscience with a short position of Samsung Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Bioscience and Samsung Life.
Diversification Opportunities for SK Bioscience and Samsung Life
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 302440 and Samsung is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding SK Bioscience Co and Samsung Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Life and SK Bioscience 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 SK Bioscience Co are associated (or correlated) with Samsung Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Life has no effect on the direction of SK Bioscience i.e., SK Bioscience and Samsung Life go up and down completely randomly.
Pair Corralation between SK Bioscience and Samsung Life
Assuming the 90 days trading horizon SK Bioscience Co is expected to under-perform the Samsung Life. In addition to that, SK Bioscience is 1.03 times more volatile than Samsung Life. It trades about -0.23 of its total potential returns per unit of risk. Samsung Life is currently generating about 0.1 per unit of volatility. If you would invest 10,060,000 in Samsung Life on August 25, 2024 and sell it today you would earn a total of 590,000 from holding Samsung Life or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Bioscience Co vs. Samsung Life
Performance |
| Timeline |
| SK Bioscience |
| Samsung Life |
SK Bioscience and Samsung Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Bioscience and Samsung Life
The main advantage of trading using opposite SK Bioscience and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Bioscience position performs unexpectedly, Samsung Life 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 Life will offset losses from the drop in Samsung Life's long position.| SK Bioscience vs. Lotte Chilsung Beverage | SK Bioscience vs. LG Household Healthcare | SK Bioscience vs. Ssangyong Information Communication | SK Bioscience vs. Nice Information Telecommunication |
| Samsung Life vs. Korea New Network | Samsung Life vs. Dong A Eltek | Samsung Life vs. Dreamus Company | Samsung Life vs. SK Bioscience 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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