Correlation Between Kbi Metal and Samsung Biologics

Can any of the company-specific risk be diversified away by investing in both Kbi Metal 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 Kbi Metal and Samsung Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kbi Metal Co and Samsung Biologics Co, you can compare the effects of market volatilities on Kbi Metal 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 Kbi Metal with a short position of Samsung Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and Samsung Biologics.

Diversification Opportunities for Kbi Metal and Samsung Biologics

0.59

Correlation Coefficient

Kbi Metal  Samsung Biologics

Very weak diversification

The 3 months correlation between Kbi and Samsung is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and Samsung Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Biologics and Kbi Metal 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 Kbi Metal Co 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 Kbi Metal i.e., Kbi Metal and Samsung Biologics go up and down completely randomly.

Pair Corralation between Kbi Metal and Samsung Biologics

If you would invest  100,000,000  in Samsung Biologics Co on December 11, 2024 and sell it today you would earn a total of  0.00  from holding Samsung Biologics Co or generate 0.0% return on investment over 90 days.

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

Kbi Metal Co  vs.  Samsung Biologics Co

Kbi Metal

Risk-Adjusted Performance

Weak

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

Samsung Biologics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Biologics Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Samsung Biologics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kbi Metal and Samsung Biologics

The main advantage of trading using opposite Kbi Metal and Samsung Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal 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.

The idea behind Kbi Metal Co and Samsung Biologics 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.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.