Correlation Between Samsung Electronics and Viridian Therapeutics
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Viridian Therapeutics 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 Electronics and Viridian Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Viridian Therapeutics, you can compare the effects of market volatilities on Samsung Electronics and Viridian Therapeutics 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 Electronics with a short position of Viridian Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Viridian Therapeutics.
Diversification Opportunities for Samsung Electronics and Viridian Therapeutics
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Samsung and Viridian is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Viridian Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viridian Therapeutics and Samsung Electronics 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 Electronics Co are associated (or correlated) with Viridian Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viridian Therapeutics has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Viridian Therapeutics go up and down completely randomly.
Pair Corralation between Samsung Electronics and Viridian Therapeutics
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.4 times more return on investment than Viridian Therapeutics. However, Samsung Electronics Co is 2.5 times less risky than Viridian Therapeutics. It trades about -0.02 of its potential returns per unit of risk. Viridian Therapeutics is currently generating about -0.03 per unit of risk. If you would invest 101,100 in Samsung Electronics Co on November 18, 2024 and sell it today you would lose (3,550) from holding Samsung Electronics Co or give up 3.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Samsung Electronics Co vs. Viridian Therapeutics
Performance |
| Timeline |
| Samsung Electronics |
| Viridian Therapeutics |
Samsung Electronics and Viridian Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Viridian Therapeutics
The main advantage of trading using opposite Samsung Electronics and Viridian Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Viridian Therapeutics 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 Viridian Therapeutics will offset losses from the drop in Viridian Therapeutics' long position.| Samsung Electronics vs. Gaztransport et Technigaz | Samsung Electronics vs. GreenX Metals | Samsung Electronics vs. Westlake Chemical Corp | Samsung Electronics vs. Europa Metals |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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