Correlation Between Aprogen KIC and Sam Chun

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

By analyzing existing cross correlation between Aprogen KIC and Sam Chun Dang, you can compare the effects of market volatilities on Aprogen KIC and Sam Chun 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 Aprogen KIC with a short position of Sam Chun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aprogen KIC and Sam Chun.

Diversification Opportunities for Aprogen KIC and Sam Chun

0.49

Correlation Coefficient

Aprogen KIC  Sam Chun

Very weak diversification

The 3 months correlation between Aprogen and Sam is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aprogen KIC and Sam Chun Dang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam Chun Dang and Aprogen KIC 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 Aprogen KIC are associated (or correlated) with Sam Chun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam Chun Dang has no effect on the direction of Aprogen KIC i.e., Aprogen KIC and Sam Chun go up and down completely randomly.

Pair Corralation between Aprogen KIC and Sam Chun

Assuming the 90 days trading horizon Aprogen KIC is expected to under-perform the Sam Chun. But the stock apears to be less risky and, when comparing its historical volatility, Aprogen KIC is 1.11 times less risky than Sam Chun. The stock trades about -0.04 of its potential returns per unit of risk. The Sam Chun Dang is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  16,680,000  in Sam Chun Dang on September 30, 2024 and sell it today you would lose (1,980,000) from holding Sam Chun Dang or give up 11.87% of portfolio value over 90 days.

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

Aprogen KIC  vs.  Sam Chun Dang

Aprogen KIC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aprogen KIC 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.

Sam Chun Dang

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sam Chun Dang are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sam Chun sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aprogen KIC and Sam Chun

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

The idea behind Aprogen KIC and Sam Chun Dang 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..