Correlation Between Samsung Electronics and Sk Biopharmaceutica

Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Sk Biopharmaceutica 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 Sk Biopharmaceutica 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 Sk Biopharmaceuticals Co, you can compare the effects of market volatilities on Samsung Electronics and Sk Biopharmaceutica 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 Sk Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Sk Biopharmaceutica.

Diversification Opportunities for Samsung Electronics and Sk Biopharmaceutica

0.08

Correlation Coefficient

Samsung Electronics  Sk Biopharmaceutica

Significant diversification

The 3 months correlation between Samsung and 326030 is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Sk Biopharmaceuticals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sk Biopharmaceuticals 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 Sk Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sk Biopharmaceuticals has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Sk Biopharmaceutica go up and down completely randomly.

Pair Corralation between Samsung Electronics and Sk Biopharmaceutica

Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.55 times more return on investment than Sk Biopharmaceutica. However, Samsung Electronics Co is 1.83 times less risky than Sk Biopharmaceutica. It trades about 0.11 of its potential returns per unit of risk. Sk Biopharmaceuticals Co is currently generating about 0.04 per unit of risk. If you would invest  4,428,600  in Samsung Electronics Co on December 26, 2024 and sell it today you would earn a total of  496,400  from holding Samsung Electronics Co or generate 11.21% return on investment over 90 days.

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

Samsung Electronics Co  vs.  Sk Biopharmaceuticals Co

Samsung Electronics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samsung Electronics sustained solid returns over the last few months and may actually be approaching a breakup point.

Sk Biopharmaceuticals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sk Biopharmaceuticals Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sk Biopharmaceutica may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Samsung Electronics and Sk Biopharmaceutica

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

The idea behind Samsung Electronics Co and Sk Biopharmaceuticals Co 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.

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 Anywhere module to track or share privately all of your investments from the convenience of any device.