Correlation Between Osang Healthcare and Samsung Biologics
Can any of the company-specific risk be diversified away by investing in both Osang Healthcare 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 Osang Healthcare and Samsung Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Osang Healthcare Co,Ltd and Samsung Biologics Co, you can compare the effects of market volatilities on Osang Healthcare 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 Osang Healthcare with a short position of Samsung Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osang Healthcare and Samsung Biologics.
Diversification Opportunities for Osang Healthcare and Samsung Biologics
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Osang and Samsung is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Osang Healthcare Co,Ltd and Samsung Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Biologics and Osang Healthcare 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 Osang Healthcare Co,Ltd 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 Osang Healthcare i.e., Osang Healthcare and Samsung Biologics go up and down completely randomly.
Pair Corralation between Osang Healthcare and Samsung Biologics
Assuming the 90 days trading horizon Osang Healthcare Co,Ltd is expected to under-perform the Samsung Biologics. In addition to that, Osang Healthcare is 1.9 times more volatile than Samsung Biologics Co. It trades about -0.07 of its total potential returns per unit of risk. Samsung Biologics Co is currently generating about -0.01 per unit of volatility. If you would invest 100,000,000 in Samsung Biologics Co on September 14, 2024 and sell it today you would lose (1,400,000) from holding Samsung Biologics Co or give up 1.4% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.31% |
Values | Daily Returns |
Osang Healthcare Co,Ltd vs. Samsung Biologics Co
Performance |
Timeline |
Osang Healthcare Co,Ltd |
Samsung Biologics |
Osang Healthcare and Samsung Biologics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Osang Healthcare and Samsung Biologics
The main advantage of trading using opposite Osang Healthcare and Samsung Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osang Healthcare 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.Osang Healthcare vs. KT Submarine Telecom | Osang Healthcare vs. LG Household Healthcare | Osang Healthcare vs. Dongil Metal Co | Osang Healthcare vs. SK Telecom Co |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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