Correlation Between Samsung Biologics and Daol Investment
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and Daol Investment 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 Daol Investment 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 Daol Investment Securities, you can compare the effects of market volatilities on Samsung Biologics and Daol Investment 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 Daol Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and Daol Investment.
Diversification Opportunities for Samsung Biologics and Daol Investment
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Daol is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and Daol Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daol Investment Secu 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 Daol Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daol Investment Secu has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and Daol Investment go up and down completely randomly.
Pair Corralation between Samsung Biologics and Daol Investment
Assuming the 90 days trading horizon Samsung Biologics Co is expected to under-perform the Daol Investment. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Biologics Co is 1.34 times less risky than Daol Investment. The stock trades about -0.01 of its potential returns per unit of risk. The Daol Investment Securities is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 266,500 in Daol Investment Securities on September 24, 2024 and sell it today you would earn a total of 45,500 from holding Daol Investment Securities or generate 17.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Biologics Co vs. Daol Investment Securities
Performance |
Timeline |
Samsung Biologics |
Daol Investment Secu |
Samsung Biologics and Daol Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Biologics and Daol Investment
The main advantage of trading using opposite Samsung Biologics and Daol Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, Daol Investment 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 Daol Investment will offset losses from the drop in Daol Investment'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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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