Correlation Between Sam A and Choong Ang

Can any of the company-specific risk be diversified away by investing in both Sam A and Choong Ang 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 Sam A and Choong Ang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sam A Pharm Co and Choong Ang Vaccine, you can compare the effects of market volatilities on Sam A and Choong Ang 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 Sam A with a short position of Choong Ang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam A and Choong Ang.

Diversification Opportunities for Sam A and Choong Ang

0.72

Correlation Coefficient

Sam A  Choong Ang

Poor diversification

The 3 months correlation between Sam and Choong is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sam A Pharm Co and Choong Ang Vaccine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choong Ang Vaccine and Sam A 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 Sam A Pharm Co are associated (or correlated) with Choong Ang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choong Ang Vaccine has no effect on the direction of Sam A i.e., Sam A and Choong Ang go up and down completely randomly.

Pair Corralation between Sam A and Choong Ang

Assuming the 90 days trading horizon Sam A Pharm Co is expected to under-perform the Choong Ang. In addition to that, Sam A is 1.7 times more volatile than Choong Ang Vaccine. It trades about -0.26 of its total potential returns per unit of risk. Choong Ang Vaccine is currently generating about -0.09 per unit of volatility. If you would invest  1,057,000  in Choong Ang Vaccine on September 3, 2024 and sell it today you would lose (65,000) from holding Choong Ang Vaccine or give up 6.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Sam A Pharm Co  vs.  Choong Ang Vaccine

Sam A Pharm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sam A Pharm Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Choong Ang Vaccine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Choong Ang Vaccine has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Sam A and Choong Ang

The main advantage of trading using opposite Sam A and Choong Ang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam A position performs unexpectedly, Choong Ang 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 Choong Ang will offset losses from the drop in Choong Ang's long position.

The idea behind Sam A Pharm Co and Choong Ang Vaccine pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.