Correlation Between Samsung Biologics and Daelim Industrial
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and Daelim Industrial 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 Biologics and Daelim Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Biologics Co and Daelim Industrial Co, you can compare the effects of market volatilities on Samsung Biologics and Daelim Industrial 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 Biologics with a short position of Daelim Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and Daelim Industrial.
Diversification Opportunities for Samsung Biologics and Daelim Industrial
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Daelim is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and Daelim Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daelim Industrial and Samsung Biologics 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 Biologics Co are associated (or correlated) with Daelim Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daelim Industrial has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and Daelim Industrial go up and down completely randomly.
Pair Corralation between Samsung Biologics and Daelim Industrial
Assuming the 90 days trading horizon Samsung Biologics Co is expected to generate 0.85 times more return on investment than Daelim Industrial. However, Samsung Biologics Co is 1.18 times less risky than Daelim Industrial. It trades about 0.03 of its potential returns per unit of risk. Daelim Industrial Co is currently generating about -0.04 per unit of risk. If you would invest 80,300,000 in Samsung Biologics Co on September 24, 2024 and sell it today you would earn a total of 13,600,000 from holding Samsung Biologics Co or generate 16.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Biologics Co vs. Daelim Industrial Co
Performance |
Timeline |
Samsung Biologics |
Daelim Industrial |
Samsung Biologics and Daelim Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Biologics and Daelim Industrial
The main advantage of trading using opposite Samsung Biologics and Daelim Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, Daelim Industrial 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 Daelim Industrial will offset losses from the drop in Daelim Industrial's long position.Samsung Biologics vs. ABL Bio | Samsung Biologics vs. ALTEOGEN | Samsung Biologics vs. Kmw Inc | Samsung Biologics vs. Celltrion Pharm |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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